What does Tims China's first quarterly report show about china and coffee?
Tims China reported total net revenue of 306 million yuan for the third quarter of 2022, up 67.9 percent year on year and a single-quarter record. It was the brand's first quarterly report since listing on Nasdaq. By September 30 it had 486 net stores across 27 cities, and in October it opened its 500th store.
The chain added 46 stores in the quarter, about one every two days, split into 454 self-operated and 32 franchise locations. Its long-term target has shifted from 1,500 stores in ten years to 2,750 profitable stores by 2026, while it also expands ready-to-drink tie-ups with EasyJoy Coffee and Hema.
After listing on Nasdaq, Tims China delivered its first quarterly report card, with total net revenue in the third quarter reaching 306 million yuan, a year-on-year increase of nearly 70%, setting a new single-quarter revenue high. In terms of stores, by the end of September it had covered 27 cities nationwide, with a net total of 486 stores, and in October it welcomed its 500th store. At the same time, Tims China continues to advance cooperation with partners such as EasyJoy Coffee and Hema, doubling down on the ready-to-drink coffee track. This article sorts through the core data from the financial report, the pace of store expansion, the store format structure, and management's outlook for the future, giving you a quick look at the latest moves of this coffee chain brand in the Chinese market.
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Recently, the well-known coffee chain brand Tim Hortons China released its financial report for the third quarter of 2022, which is also the brand's first quarterly performance report since it was listed on Nasdaq. Data shows that the company's total net revenue for this quarter was 306 million yuan, a year-on-year increase of 67.9%, setting a record high for single-quarter revenue.
According to information disclosed in the financial report, Tim Hortons China opened 46 new stores in the third quarter. As of September 30, 2022, the net total number of stores reached 486, including 454 self-operated stores and 32 franchise stores, covering 27 cities nationwide. From this, it is not difficult to see that the brand's pace of opening stores is relatively steady, with a new store opening roughly every two days. In October of this year, the company also announced the official opening of its 500th store nationwide.
However, affected by the pandemic, Tims China's overall pace of store expansion this year still appears somewhat slow. It is understood that when Tims China entered the Chinese market in 2019, it had set the goal of "opening 1,500 stores in ten years," while in the past two years, the company's goal has been adjusted to "increasing to 2,750 profitable stores by 2026," mainly direct-operated stores, with the proportion of franchise stores adjusted later according to actual conditions. If calculated according to this plan, an average of 500 to 600 new stores would need to be opened each year in the future, and there is still a considerable gap from that goal at present.
Tims China introduced that this year, the Tims Express (Lingfeng store) store-within-a-store format jointly created with EasyJoy Coffee has opened multiple stores in Beijing, Shanghai, Suzhou, and other places, with good operating performance. A Tims Express requires only about 20 square meters and one counter to operate, so it is relatively easy to penetrate locations with ideal foot traffic and coffee demand. The company expects that in 2023, Tims Express will achieve rapid growth in the number of stores, and its proportion will increase year by year.
Following the cooperation reached in July with EasyJoy Coffee under Sinopec EasyJoy, on November 18, Tims China announced the signing of a two-year cooperation agreement with Shanghai Hema IoT Co., Ltd. According to the agreement, the two parties will launch co-branded ready-to-drink coffee products and sell them exclusively through Hema Fresh's online channels and offline stores. This is Tims China's second move in the ready-to-drink coffee sector.
Tims China's continued expansion in the ready-to-drink market may be because it has seen that the ready-to-drink coffee track is gradually becoming a popular field. As products that are easy to carry and ready to drink upon opening, RTD coffee has risen rapidly in recent years and can now be seen everywhere in many retail terminals.
Public information shows that in addition to Tims Express, Tims China currently has three main store formats, namely flagship stores (Jinfeng store), standard stores (Hongfeng store), and grab-and-go Tims Go (Jiefeng store). Among them, flagship stores (Jinfeng store) usually have an area of about 200 square meters and mainly serve as the first store in a city to expand brand influence.
Standard stores (Hongfeng store) have an area of about 150 square meters and are located in shopping malls, communities, industrial parks, office buildings, and other places. Both flagship stores and standard stores offer a full range of freshly made meals and coffee drinks. Tims Go (Jiefeng store) is a small store-within-a-store model, which has previously entered Metro China stores.
Regarding this performance, Tims China CEO Lu Yongchen said: "The company's strong performance is mainly due to customers' growing recognition of the absolute convenience, genuine localization and community orientation, and continuous innovation provided by Tims China. In the future, as brand awareness and user loyalty continue to increase, innovating service formats through external cooperation and enriching the product portfolio will expand greater development potential for the company."
Although the golden market of coffee is growing rapidly, there is still a long way to go before it becomes a mature market, and it is still difficult to see the "ceiling" at present. We look forward to what kind of legend Tims China will bring to Chinese consumers in the future.
Image source: Internet
The above content is compiled by CoffeeHunters, a coffee news website.
