Tim Hortons coffee coming to a Burger King near you?
Spicy chicken sandwiches, chicken fries and dark roast coffee are hot menu items these days, lifting sales at Tim Hortons and Burger King, the two soon-to-merge fast food giants said respectively last week. So why not sell them through both restaurants?
Burger King might be planning to, according to some experts.
While each food chain has downplayed the potential to mix products or let each brand occupy real estate on the other’s menu, the potential to cross-sell is one of the most compelling drivers of their pending mega-merger, some suggest.
“The companies have been quite dismissive of the idea. But I think it’ll be done,” Keith Howlett, an industry analyst at Desjardins Securities said.
Both sides have been firm in that consumers won’t be seeing Whoppers at Tim Hortons locations or timbits at Burger King any time soon.
“Absolutely not,” was Tims chief Marc Caira’s response when asked in August if the company’s famed coffee will end up alongside burger combos.
Daniel Schwartz, the head of Burger King, made the point crystal clear: “There’s no plan to mix the product or do any co-branding.” The “real driver,” Schwartz said, was international growth.
But Howlett and other experts suggest the ability to sell Tims menu items through Burger King locations could rank number two in reasons why the pair are merging.
Burger King’s 7,155 restaurants in the United States could use Tims to ramp up its breakfast traffic, they say.
“Breakfast and the coffee business are the top two hot button [growth segments] in the U.S., and to some extent beyond,” the Desjardins analyst said.
Though Burger King is likely to start off small, it may not be long before Tim Hortons menu items are staple features at locations across the United States, some experts suggest.
In Canada, the benefits of cross-selling menu items aren’t as clear. Tim Hortons is by far the leading brand among fast food chains, something that risks being damaged if Burger King invades the menu.
Still, that doesn’t mean Canadian consumers won’t see something turn up in a Tim Hortons lunch combo that looks and tastes an awful lot like a Whopper or other Burger King menu item, Howlett said.
While the average amount Canadian customers are spending at Tims is rising, the company is looking for ways to stop a fall in overall foot traffic, which has declined for the past two and a half years. Burger King items, such as their successful chicken fries, could help.
As for Tims’ coffee making its way into Burger King’s 295 Canadian locations, that’s likely a non-starter – and what Mr. Caira’s rebuff was referring to on August’s conference call.
As the lifeblood of the Tim Hortons network of 3,600 stores, most of which are owned by franchisees, Tim Hortons won’t likely surrender its domestic hold over its coffee any time soon.
“It might help traffic to put in Tim Hortons coffee at Burger King, but your franchisees in Canada probably aren’t too excited about that prospect,” Howlett said.
© 2014 Shaw Media