Net Revenue of 306 Million! Tims China Reports Significant Growth in First Quarterly Report Since IPO

Tims China Reports Strong Q3 2022 Financial Results

Tim Hortons China, the well-known coffee chain, has announced its third-quarter 2022 financial report - the company's first quarterly report since listing on Nasdaq. The numbers show total net revenue of 306 million yuan for the quarter, up 67.9% year-on-year and a new single-quarter revenue record.

Store Expansion Strategy

According to the report, 46 new stores opened in the third quarter. As of September 30, 2022, the store count stood at 486 - 454 self-operated and 32 franchised - spread across 27 cities nationwide. Expansion is proceeding at a steady clip of roughly one new store every two days, and in October the company announced its 500th store nationwide.

Pandemic disruptions did slow Tims China's expansion somewhat this year. When the brand entered the Chinese market in 2019, it set a target of "opening 1,500 stores in 10 years." That goal has since shifted to "growing to 2,750 profitable stores by 2026," focused mainly on directly operated stores, with the franchised proportion to be adjusted as circumstances allow. Meeting that plan means opening an average of 500-600 new stores a year - the current count still falls well short of that pace.

Tims Express Expansion

Tims China also revealed that Tims Express (Lingfeng Store), its joint venture with Sinopec's Easy Joy Coffee, has opened multiple stores in Beijing, Shanghai, and Suzhou this year with solid results. A Tims Express counter needs only about 20 square meters, making it easy to plant in locations with strong foot traffic and coffee demand. Rapid growth in Tims Express store numbers is expected in 2023, with its share of the network rising year by year.

Strategic Partnerships

Following the July cooperation with Easy Joy Coffee, Tims China announced a two-year cooperation agreement with Shanghai Hema IoT Co., Ltd. on November 18. Under the agreement, the two parties will launch co-branded ready-to-drink coffee products sold exclusively through Hema Fresh's online channels and offline stores - Tims China's second move into the RTD coffee market.

Ready-to-Drink Market Expansion

The company's continued push into ready-to-drink reflects how hot the RTD segment has become. Convenient to carry and ready to drink straight away, RTD coffee has grown rapidly in recent years and now appears everywhere in retail terminals.

Store Format Portfolio

Beyond Tims Express, Tims China's three other main store formats are flagship stores (Jinfeng Store), standard stores (Red Maple Store), and the grab-and-go Tims Go (Jiefeng Store). Flagship stores typically cover about 200 square meters and usually serve as the first store in a new city to build brand influence.

Standard stores cover about 150 square meters and are located in shopping centers, communities, parks, and office buildings. Both flagship and standard stores offer a full range of freshly prepared food and coffee beverages. Tims Go is a compact store-in-store format that previously entered Metro China locations.

CEO's Perspective

Commenting on the results, Tims China CEO Lu Yongchen said: "The company's strong performance is mainly attributed to customers' growing recognition of the absolute convenience, genuine localization, and community focus provided by Tims China, as well as continuous innovation. In the future, as brand awareness and user loyalty keep improving, external cooperation to innovate service formats and enrich the product portfolio will unlock greater development potential."

Future Outlook

China's coffee market is growing fast, but it is still far from mature - the "ceiling" is nowhere in sight yet. It remains to be seen what Tims China will deliver for Chinese consumers next.

Image source: Internet

FrontStreet Coffee Recommendation

Reading about chain coffee growth is one thing; tasting great coffee at home is another. If you want an easy entry point, FrontStreet Coffee suggests starting with its beginner-friendly single origins: the FrontStreet Brazil Cerrado Red Bourbon for a balanced, creamy, peanut-and-cocoa daily cup, or the FrontStreet Ethiopia Natural Sidamo Huakui for sweet berry, floral, and honey notes with barely any bitterness.

Prefer something with more backbone for your morning routine? FrontStreet Indonesia Lintong Mandheling offers a thick, smooth, low-acid body with herbal and spice notes - a reminder that some of the best coffee still comes from a simple pour-over rather than a grab-and-go cup.