On December 30, Tim Hortons China disclosed to the public that it plans to expand the number of stores in the Chinese market to more than 800 by 2022, and hopes to open at least 2,750 profitable stores by the end of 2026.
To date, Tim Hortons has opened more than 390 stores in more than 20 cities, including Dalian, Nanjing, Beijing, Xiamen, Guangzhou and Shenzhen. To achieve its latest 2022 store expansion plan means it will need to expand at a rate of at least one store per day next year.
Referring to Tim Hortons’ goal of opening 1,500 stores in 10 years when it first entered China in 2019, the pace of its store expansion has increased significantly.
At present, Tim Hortons’ offline stores in China include three types of stores: standard stores, Tims Go Jie Feng stores (Tims Go捷枫店) and theme stores, which correspond to the three consumption modes of “daily drinking”, “buy-and-go” and “personalized experience” respectively. Among them, the standard store for mass consumers is the main store type of Tim Hortons.
Tims Go is the new store type that Tim Hortons will launch in 2021. In order to promote Tims Go stores, Tim Hortons announced a strategic cooperation with Metro China in November this year and entered Metro stores. The themed stores focus on community culture to tap into the youth market. At present, Tim Hortons has cooperated with Tencent Gaming, QQ Music, Bilibili, Ele.me, etc. to launch stores with different themes.
The rapid store expansion is in preparation for the IPO of Tim Hortons’ China business.
According to Bloomberg, Tim Hortons China Chairman Peter Yu has previously said that the rapid expansion is a prelude to the IPO of Tim Hortons China’s China business after its merger with blank check company Silver Crest Acquisition Corp. The merger could be completed in the first quarter of 2022.
That pace has been slightly delayed from its previous plans. In a timeline disclosed by Tim Hortons China in August, executives had said the deal to fund the expansion would be completed by the end of 2021.Notably, along with the rapid store expansion, Tim Hortons China has also set a goal of opening at least 2,750 profitable stores by the end of 2026, with Tim Hortons China saying the brand is now entering a critical period of store expansion ramp-up and wants to focus on quality store expansion.
According to Tim Hortons China, it forecasts total revenue of $103.9 million (approximately RMB 665 million) in 2021; adjusted store EBITDA (earnings before taxes, interest, depreciation and amortization) of $5.7 million (approximately RMB 36.48 million); and adjusted corporate EBITDA loss of $14.7 million (approximately RMB 94.08 million), and expects to turn losses into profits in 2023. Source