One of Canada’s most iconic brands is suddenly facing a loyalty crisis.
After announcing sagging profits and lower same-store sales at Tim Hortons franchises earlier this week, parent company Restaurant Brands International Inc. (RBI), partially blamed the rapid expansion of the coffee shop’s loyalty program, which swelled to a massive 7.5 million members.
“We’ve attracted far more guests to our loyalty program far more quickly than we had planned,” RBI CEO Jose Cil said during a post-earnings conference call.
Cil said the barrage of giveaways dragged down comparable sales in Canada by three per cent.
“Despite our recent results, we have a clear plan and believe it’s within our control to restore Tim Hortons to growth in Canada,” he said.
That clear plan involves a revamp of the rewards system. The new program will be based on points rather than visits. It goes into effect on Feb. 27.
The new system encourages customers to register online, offering more rewards options for those who do so. RBI said only 25 per cent of members are currently registered.
The company explained some of the changes:
Many Tim Hortons patrons rejected the idea that sales woes have anything to do with the loyalty program, blaming everything from coffee cup lids to questionable food quality for the drop in sales.
The new system was also criticized for being confusing and inconvenient.
I stopped going due to the slow service, crappy coffee, frozen donuts & screwed up orders.
Loyalty program ain’t gonna help, fix your customer service have fair wages for your employees lower your prices. @TimHortons
— JuveRob (@Jabronirob) February 11, 2020
@TimHortons changes coming to the loyalty card can someone explain? For every purchase I make over 0.50 I get 10 pts. Why is not points based on the value of the purchase? This why money is lost.I buy 3 large dbl dbl a day.someone buys 2 Timbts 3 times a day.the same points?
— wondering (@Shawn82538349) February 11, 2020
@TimHortons in order to participate in a loyalty rewards program one needs to be a ‘loyal’ customer (or one at all) first. There is no incentive to go spend hard earned money on sub-par products. You never should have changed the original food items and built upon them instead.
— Often unimpressed (@Comm_Queen) February 11, 2020
@TimHortons how do you call this new program loyalty? I get the same points whether I spend $0.50 or $50? At least allow me to break it up into as many $0.50 transactions so I can actually earn decent points! You haven’t really improved this program!
— Sherif Ebeid (@sherifebeid) February 11, 2020
Let me get this straight. @TimHortons loyalty program worked so well that they’ve decided to change it and force members to MANUALLY “upgrade” or risk getting a worse deal??? Just another un-Canadian move from a former Canadian company. #enoughalready
— Jerry Bowley (@cuppojoe) February 10, 2020
@TimHortons so as a Tim’s App user since the start and a regular customer. That loyalty to the brand and supporter of its app are worth 10 points? The same amount everyone will get for a normal visit now??…what a slap to the face! pic.twitter.com/dZlWUpQXoQ
— Sarah McIntosh (@SaraJane2912) February 11, 2020
No thanks, I’m out, i don’t have room in my head for another complicated (and data collecting, email generating password saving), loyalty program. Tims Rewards: What changes to the Tim Hortons loyalty program mean to Canadians https://t.co/qK0xk4wSNl
— Catherine in Chester (@ChesterHrt) February 12, 2020
The updated loyalty program @TimHortons makes little sense. I have to keep track how how many points I have? You will lose many folks who won’t be bothered. Also 220 points and buy a “Premium Breakfast Sandwich” when there isn’t one on the menu.
— Jared Conway (@JaredJConway) February 10, 2020
Customers who can’t afford a smartphone now can no longer participate in their “loyalty” program because @TimHortons will not accept the physical card any longer. The cashiers are pushing the transaction through before you can scan your card and then tell you “it’s too late
— RGNMCHLL (@rgnmchll) February 11, 2020
@TimHortons you guys simply don’t seem to understand loyalty programs. A fixed number of points per visit penalizes someone who buys a dozen donuts or a lunch over someone who buys a donut or a cup of coffee. It should be spend based not visit based. #ugh
— Paul Beaudry (@paul_beaudry) February 10, 2020
@TimHortons I’ve been a loyal customer since I was 16, I’m 40 now, changing your rewards cards so you “don’t lose out” on profits is a joke. You were on par with McDonalds with how it is now even if your coffee isn’t as good. You’ve wrecked what was once a great Canadian
— algdubldubl (@a_lg_dubldubl) February 12, 2020
@TimHortons your announced changes to Tim’s rewards isn’t very good. It’s complicated and missing the mark. I am registered to your competitors app but not yours, it has nothing to do with a points system. Try again…
— Chun Wu (@TheChunWu) February 12, 2020
I’m throwing out my #TimHortons loyalty card. It was always bad, and now their new points program and rim contest is even more confusing. Over to a better and bigger cup from #McDonalds with simple rewards.
— Gary_C (@GaryC_Ontario) February 11, 2020
Hey @TimHortons your sales didn’t decline because of the rewards system, your sales are declining because Canadians are extremely disappointed with the direction of the company after the 3G Capital buyout. Food sucks, coffee sucks, donuts suck. Turned a national icon into a joke.
— TCGAddictionCA (@ca_tcg) February 11, 2020
Tim Hortons also announced a number of other changes in hopes to boost their profits. Some of those changes include:
- Tim Hortons plans to accelerate a roll out of fresh coffee brewers for better-tasting and more consistent coffee quality.
- The chain will start offering more than one type of milk for customers, including skim milk and a dairy alternative, almond, starting this spring.
- Tim Hortons is working to improve the quality of bacon in its sandwiches.
- The company will transform nearly all its drive-through boards to digital from paper which will allow it to tailor offerings based on location, time, weather and other factors.