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March 03, 2022

Tim Hortons wages 'all-out war' for U.S. territory

If you live in certain parts of Canada, you remember Krispy Kreme Doughnuts, the U.S. heavyweight that tried to creep north a few years back and establish itself across the border.

To much hype, Krispy Kreme opened its first Canadian outlet in Mississauga in 2001 and – after its initial success – announced another 32 franchises would soon follow.

Well, we all know what happened then: the novelty of the donut shop quickly wore off as popular culture continued its shift away from fatty, Orson Welles-like unhealthy foods.

Canadians, it seemed, only wanted to get their pastries from one place, and of the 18 Krispy Kreme stores that actually opened here, just five now exist save for a few kiosks in gas stations. The lesson – don’t mess with Tim Hortons on its home turf.

Yet, would that same principle apply if the tables were turned?

Tims, as you know, is making waves in the U.S. these days. It has stores scattered across a few states and even some primo Yankee real estate inside Times Square.

Though while the Canadian coffee giant has only flirted with Yankee expansion before, could Tim Hortons do what Krispy Kreme couldn’t? Invade the U.S. and knock off the incumbent java power-chain, Starbucks.

According to MSN Money down south, Tims is coming on strong in Michigan, at least, swallowing up the territory that Starbucks is retreating from.

The article claims Tims is “waging an all-out war” against the Seattle chain in the Wolverine State, and that it’s only in its beginning stages of the Canadian retailer’s plan to soon dominate the U.S.

With 125 new Michigan stores on the way – and Starbucks’ having shuttered as many as 25 sites over the past two years – Tims is certainly making a strong U.S. play. But can it sustain?

Tims unquestionably survives in Canada because it’s a staple of local society, yet what reasons would American consumers have to accept its encroachment on their territory?

Here’s one: low-cost. There’s no time more than now where people, especially in Michigan, respect their money. Tims offers good food and coffee at fair prices, and that’s something that’ll legitimately register with a state trying to recover from a 15 per cent unemployment rate.

Will Tims succeed, then, in the northern U.S. and beyond? That’s up for some debate. It appears, at least, that Michigan is a pretty good start.

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...