Tim Hortons plans to expand outlets in India to 120 stores in the next 3years

INDIA – Canadian multinational coffeehouse and restaurant chain Tim Hortons (Tim’s, or Timmie’s) plans to open around 120 stores in India in the next three years at an investment of up to Rs 300 crore.

Tim Hortons entered into an exclusive master franchise agreement with AG Café, the joint venture between global fashion and lifestyle retail conglomerate Apparel Group and emerging markets alternative investment manager Gateway Partners, to open outlets in India.

Navin Gurnaney, CEO of Tim Hortons India, said the chain is currently focused on expansion in north India with plans to subsequently enter markets such as Mumbai, Pune, and Surat.

The chain is focused on the north, which is Delhi and Punjab but in early summer, or late spring it will be in Mumbai, Pune, Surat, and Ahmedabad.

The company could exceed the target in the first year, it looks to be “building the foundation” with 20 new stores followed by another 50 new stores in the following 12 months and later followed by another 60 new stores in the third year, Navin note.

He highlighted that there could be some off-highway locations, such as Bangalore, which the company is also considering.

All these stores will be company-owned, Navin said, adding the “investment per store is between Rs 2 crore to Rs 2.5 crore, located in malls, high streets, airports, and office complexes.

At present, Tim Hortons has six stores — five in Delhi-NCR and one in Chandigarh, and by December, three more stores will also be opened. These are among the more than 5,400 around the world.

In India, sales of beverages account for a little over 60% of the chain that sells coffee and baked goods.

Bullish on the Indian market, he said: “It’s the consumer spending in India. The global aspirations, the number of industries that are coming to India and adding to people’s ability to spend more, the social media that makes them think differently globally, any retail brand has prima facie the possibility of success, then it depends on how well you execute.”

The investment plan from Tims comes at a time when India’s food service market is expected to reach US$79.65 billion by 2028, growing at a CAGR of 11.19 percent from US$41.1 billion in 2022, according to the Food Service and Restaurant Business Report 2022-23, by Francorp and restaurantindia.in.

The report added that the country’s quick service restaurants (QSR) market is estimated to be US$690.21 million in 2022 and is expected to reach US$1069.3 million by 2027, growing at a CAGR of 9.15 percent.

Over FY20-25, the QSR chain market is estimated to be the highest-growing sub-segment- at 23 percent CAGR — in the entire food service market, not just the chain market.

The report pointed out that the annual spending of middle-class households on fast food restaurants in India’s Tier II and III cities has grown by 108 percent in the last two years, from Rs 2,500 to Rs 5,400.

However, due to inflation, nearly 51 percent of consumers are either dining out less or ordering less frequently, while nearly 40 percent of them are ordering fewer items or ordering less expensive items in their order.

The main challenges for the sector, as the report said, continue to be supply delays or shortages of key food or beverage items which 96 percent of operators experienced in 2021 and are likely to continue in 2022-23.

Meanwhile, Tim Hortons in China has forged a two-year partnership with Alibaba Group’s grocery chain that will see the two launch co-branded products which include drinks such as Velvet Cocoa Coffee.

E-commerce giant Alibaba’s Freshippo will begin sales next month at its stores, of which it has more than 300, as well as through its official app, it said in a statement.

Tims China was founded in 2019 by Cartesian Capital Group and Canada’s Restaurant Brands International, which also owns the Burger King and Popeyes brands in addition to Tim Hortons.

It opened its 500th outlet in China last month and has set its sights on having a “profitable network” of 2,750 stores in the country by 2026.

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