Tim Hortons is pressing ahead with 80 new Canadian restaurants, hundreds of renovations and a broader beverage and loyalty strategy after sales growth at existing locations nearly stalled during the second quarter.
Comparable sales at Tim Hortons restaurants in Canada increased just 0.1% during the three months ended June 30, down sharply from the growth recorded over the previous year. The result stood out against stronger consolidated performance at parent company Restaurant Brands International, where Burger King and the company’s international operations drove much of the quarter’s momentum.
RBI executives attributed the slowdown largely to Tim Hortons’ own marketing and product calendar while maintaining that the broader Canadian foodservice environment remained relatively stable. Management is now counting on restaurant development, cold beverages, afternoon food occasions, a stronger promotional calendar and a forthcoming Canadian Tire loyalty partnership to generate renewed momentum.
Canadian Sales Growth Slows Sharply
The second-quarter result continued a marked deceleration for Tim Hortons in its home market. Canadian comparable sales grew 3.6% during the same quarter last year, followed by growth of 2.8% in the fourth quarter of 2025 and 1.5% in the first quarter of 2026. By the second quarter, growth had slowed to almost zero.
RBI Chief Executive Officer Josh Kobza said Tim Hortons maintained its leadership positions in coffee, breakfast and baked goods, but acknowledged that the company’s marketing calendar did not produce the results management had expected. The brand was also comparing against several major product launches from the previous year.
Results improved as the quarter progressed, according to management, helped in part by the return of Tim Hortons Melts. Kobza described Melts as one of the menu items customers had most frequently requested.
RBI did not primarily blame the slowdown on a weakening Canadian consumer.
Kobza characterized the country’s broader economic conditions as relatively stable and said Canadian foodservice sales grew by approximately 3% during the quarter. Some chains were performing better than others, he said, but Tim Hortons’ performance remained largely within the company’s control. That assessment places greater weight on the brand’s ability to restore growth through stronger products, marketing and execution.
Why Tim Hortons Is Still Opening Restaurants
The slowdown has not changed Tim Hortons’ Canadian development plans. The company expects to open approximately 80 restaurants across every province in 2026, compared with more than 50 openings last year. Most will be conventional drive-thru locations, which RBI says can provide franchisees with investment payback periods of less than three years.
The openings form part of a previously announced $400-million Canadian investment by Tim Hortons and its restaurant owners. Restaurant owners are expected to contribute approximately $270 million, while Tim Hortons will invest about $130 million. The program also includes renovations at roughly 400 existing locations.
Approximately 60 restaurant owners are involved in the new development program, while about 280 owners are participating in renovations. The level of franchisee investment indicates continued confidence in Canadian development even as comparable-sales growth has softened.
New restaurants can produce attractive returns even during a period when growth across the established restaurant base has slowed, particularly as population growth and development create new opportunities for convenient quick-service locations.
Tim Hortons and its restaurant owners operate approximately 4,000 locations in Canada, giving the brand extensive national coverage. Opening another 80 restaurants will add system sales and expand that footprint, but producing stronger growth across thousands of established restaurants will have a much larger effect on the Canadian business.
Building Business Beyond Breakfast
Cold beverages and afternoon visits have become central to that effort. Tim Hortons recently introduced matcha nationally, providing a new platform aimed partly at customers who may not visit the chain for its traditional hot coffee and breakfast offerings.
Kobza said matcha has a strong connection to cold beverages and afternoon consumption, a period Tim Hortons is working to develop as a larger part of its business. The strategic value of the launch therefore extends beyond a single drink, giving Tim Hortons a platform for additional innovation while helping the chain compete for visits outside its dominant morning daypart.
Tim Hortons is also installing new fountain equipment across its Canadian restaurant network. Management says the equipment will improve operational efficiency while supporting a wider range of cold beverages, including Soda Swirls, the company’s entry into the “dirty soda” category in which soft drinks are combined with flavoured syrups, cream or other ingredients.
RBI said Tim Hortons has increased the pace of cold-beverage innovation and expects more launches over the next six to 12 months. The broader goal is to create additional reasons for customers to visit throughout the day.
A customer who already associates Tim Hortons with morning coffee may need a different product or occasion to return later in the day. Matcha, fountain beverages and additional food options are intended to build those incremental visits, bringing Tim Hortons into greater competition with chains that have developed substantial businesses around iced drinks, customized beverages and afternoon snacks.
Canadian Tire Partnership Targets Frequency
Tim Hortons is also preparing to launch its loyalty partnership with Canadian Tire during the second half of 2026. The partnership will allow customers to connect their Tims Rewards and Triangle Rewards accounts, continuing to collect Tims Rewards points while also earning Canadian Tire Money on eligible Tim Hortons purchases.
Linked customers are expected to receive offers through both programs, while eligible Triangle credit-card users will have additional earning opportunities. The arrangement brings together two of Canada’s most prominent loyalty ecosystems and connects a high-frequency restaurant purchase with a broader retail rewards program.
For Tim Hortons, the partnership provides another mechanism for encouraging repeat visits by giving customers an additional reward when choosing the chain for routine food and beverage purchases.
RBI highlighted the Canadian Tire relationship several times during its earnings call, positioning it as an important component of the brand’s second-half strategy. The launch also comes as restaurant operators across Canada continue to compete heavily on value, an area where Tim Hortons says it maintains a leading consumer perception.
New Competition Approaches
Tim Hortons’ effort to accelerate beverage innovation comes as Dunkin’ prepares to return to Canada. During RBI’s earnings call, an analyst asked management whether Tim Hortons needed to move more quickly as a prominent northeastern U.S. chain prepared to re-enter the market.
The reference was to Dunkin’, which has signed a Canadian master-franchise agreement with Montreal-based restaurant company Foodtastic. The first returning Dunkin’ location is expected to open in late 2026 or early 2027. Foodtastic has discussed a long-term opportunity for hundreds of Canadian restaurants, although those figures represent an ambition and not a near-term development commitment.
Dunkin’ previously operated extensively in Canada before leaving the market in 2018. Its returning Canadian business will begin from a dramatically smaller base than Tim Hortons, while Foodtastic brings established restaurant-development experience through a portfolio that includes Second Cup, Freshii and other concepts.
RBI executives showed little concern about the prospect of renewed competition. Kobza said restaurant markets are always competitive and pointed to Tim Hortons’ accelerating cold-beverage pipeline as evidence that the company is responding to changing customer preferences.
RBI Executive Chairman Patrick Doyle emphasized Tim Hortons’ scale, franchisee network, value position and continuing restaurant investment. He argued that recent competitive announcements would not fundamentally alter the Canadian landscape over the longer term.
Dunkin’ is unlikely to challenge Tim Hortons’ national scale in the near term, but its return could add competition in individual markets and beverage categories. The questions from analysts also show the attention being paid to Tim Hortons’ ability to innovate as competitors pursue many of the same cold-beverage and afternoon occasions.
The Test for the Second Half
Tim Hortons has several initiatives planned for the remainder of the year. The company has launched matcha, returned Melts to the menu and is preparing a Harry Potter: Back to Hogwarts promotion featuring themed baked goods and beverages. New breakfast flavours and another major holiday partnership are also planned.
Those promotions could generate short-term traffic, while the more consequential question is whether Tim Hortons can create customer behaviour that continues after individual campaigns end. Cold beverages, afternoon food, restaurant renovations and the Canadian Tire loyalty partnership are all intended to create more frequent and varied reasons to visit.
Tim Hortons enters the second half with considerable advantages in Canada, including extensive national scale, established consumer awareness and restaurant owners willing to invest substantial capital in new and existing locations.
The second-quarter result showed that those advantages do not automatically translate into continued comparable-sales growth.
The planned 80 openings will expand the system and add sales. The bigger test is whether Tim Hortons can generate more visits across the approximately 4,000 Canadian restaurants it already has.
The performance of its beverage pipeline, promotional calendar and loyalty partnership over the coming quarters will help show whether the 0.1% result was a temporary interruption or an indication that growth in Tim Hortons’ mature home market is becoming more difficult to generate.
