I go to Tim Hortons about three times a week, mostly for coffee and an egg sandwich and sometimes an ‘Ol Fashioned plain doughnut.
I’m not alone in this habit.
About 5.3 million Canadians visit a Tim’s every day, using stats from the Tim Hortons website.
I prefer coffee, but a sizable percentage of that 5.3 million are now buying cold drinks at Tim Hortons.
In its financial report for the second quarter of 2023, Tim’s noted that quarterly sales exceeded US$2 billion for the first time in the company’s history.
Sales of cold beverages helped push Tim’s above the $2 billion mark.
Those sales now represent 40 percent of all drink sales for the chain, the Financial Post reported in August.
Duncan Fulton, RBI’s chief corporate officer, said Tim’s has been focused on growing its cold beverages market share, as well as its food sales at lunch and dinner, because those items attract younger customers, the Post said.
“Tim Hortons franchisees are seeing improved sales, improved traffic, improved profitability across the board,” Fulton said.
So, here’s a question: if Canadians have $4 to buy a sugary drink at Tim Hortons, why can’t they afford $4 at the grocery store to buy one kilogram of apples or a container of strawberries?
This week, Dalhousie University’s Agri-Food Analytics Lab released its latest survey of Canadians and perceptions of grocery store prices in the country.
About 45 percent of respondents said they’re putting a greater emphasis on the cost of food rather than nutrition.
Further, 63 percent of people are worried that compromising on nutrition will affect their health in the long term.
That’s interesting, but let’s return to the sales of sugary drinks.
Tim Hortons demographic is large and should be fairly representative of Canada’s population. Sure, there are elites and socialists who don’t want their neighbours to see them in the Tim’s drive-thru, so they pay $6 for organic, fair trade, shame-free coffee.
But most Canadians go to Tim’s.
So, again, if Canadians are dead broke and are choosing to buy Kraft Dinner instead of a pre-packaged salad at Safeway, why are sales of cold, non-essential drinks going through the roof?
Much like the Tim Hortons sales data, revenues at Boston Pizza were also strong in the second quarter in 2023. Sales at its 377 restaurants were about $234 million, up from $219 million in 2022.
Boston Pizza noted this increase is not related to COVID restrictions. Most COVID rules were eliminated in the spring of 2022.
Again, if Canadians can’t afford groceries, why are they taking their family to Boston Pizza on a Friday and spending $120 on pizza and drinks?
Anecdotally, I can confirm that Boston Pizza is doing fine. I tried to take my family to one of its restaurants in Manitoba on a Friday in September. We were told that the wait for a table was 45 minutes.
I could go on, listing other examples of how Canadians have money for non-essential items (the Barbie movie grossed more than US $1 billion this summer), but they’re flat broke at the grocery store.
Maybe the headline from the Dalhousie survey, and similar polls, should be the following: Canadians ‘don’t like’ paying higher prices at the grocery store.
The concerning bit for Canada’s agriculture and food industry is that politicians are paying attention. Prime Minister Justin Trudeau has promised, several times, to crack down on grocery store executives and their excessive profits.
Most Canadians likely support such a move.
Given their willingness to spend money on non-essential items, but not on food, many Canadians might believe that profits shouldn’t exist in the food value chain, that farmers, processors, manufacturers and food retailers should provide cheap and high quality food and then reap a one percent return for their work.
That sort of perception is a large problem for the agri-food sector, now and into the future.
Robert Arnason is a Western Producer reporter based in Winnipeg.
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