Tim Hortons is planning to “refocus” in the year ahead, after dragging down sales growth of parent company Restaurant Brands International Inc. in 2019.
RBI raised its dividend on Monday after reporting revenues of US$1.48-billion in the three months ended Dec. 31, up from US$1.39-billion in the same period the previous year. The company will increase its quarterly dividend to 52 US cents per share, from 50 US cents.
The company’s performance was boosted by growth in Burger King restaurants and the popularity of a new chicken sandwich launch at Popeyes Louisiana Kitchen. But Tim Hortons’ performance lagged. The coffee and donuts chain’s comparable sales were down 1.5 per cent in the twelve months ended Dec. 31, the company reported on Monday, while its other fast-food chains grew: sales at Burger King grew 3.4 per cent in 2019, while Popeyes had 12.1-per-cent growth. (Comparable sales are counted at restaurants open more than a year, an important measure to show growth that is attained not just through opening new restaurants. At RBI, the term is applied for restaurants open 13 months or more in the case of Tim Hortons and Burger King, and 17 months or more for Popeyes.)
“At Tim Hortons, our performance did not reflect the incredible power of our brand and it is clear that we have a large opportunity to refocus on our founding values and what has made us famous with our guests over the years, which will be the basis for our plan in 2020,” RBI chief executive officer Jose Cil said in a statement on Monday.
Tim Hortons is the largest driver of total revenue for Toronto-based RBI through store sales and franchise and property revenue, even though it has far fewer stores than Burger King. It contributed US$872-million in the fourth quarter, compared to US$462-million for Burger King and US$145-million from Popeyes. Tim Hortons had 4,932 restaurants as of Dec. 31, while Burger King had 18,838 and Popeyes had 3,316. But the company is investing more heavily in expanding the store count of the other two banners as part of its plan to grow to more than 40,000 stores within eight to ten years. Burger King accounted for 1,000 of the 1,342 net restaurant openings in 2019.
Meanwhile, Tim Hortons will spend the coming year focusing on “fundamentals” to fix lagging performance in Canada, the company said on Monday.
Recently, a group representing Tim Hortons franchisees that settled lawsuits with the parent company last year, has regrouped and launched a recruiting drive under a new name. The Great White North Franchisee Association, which was formed in 2017 to represent restaurant owners’ concerns to management, is now called the Alliance of Canadian Franchisees. Tim Hortons has an advisory board made up of franchisees elected by other restaurant owners. It consults with the advisory board on business strategy and to hear franchisee concerns. At recent meetings with company executives, the new Alliance encouraged members to raise concerns that included low sales volume at some locations; glitches in the payment system; and frequent changes to the menu that complicated operations, slowed down service, and added to stores’ costs. One of those menu experiments was serving Beyond Meat imitation meat products in burgers and breakfast sandwiches. The burgers were offered for just three months, but the breakfast sandwiches stayed on the menu in B.C. and Ontario until late last month, when the company confirmed they would be phased out.
On Monday, RBI reported system-wide restaurant sales of US$8.9-billion in the fourth quarter and US$34-billion in 2019, representing full-year growth of 8.3 per cent, driven partly by 5.2-per-cent growth in the number of restaurants.
Net income for the three months ended Dec. 31 was US$257-million or 55 US cents per share, compared to US$301-million or 65 US cents per share in the same period in 2018. Its 2019 net income was US$1.1-billion, roughly flat compared to the previous year.
This Week's Top Story: Canada's Real Estate Bubble Eliminated By Data Revision & More Experts See Lower Prices – Better Dwelling – Better Dwelling
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- This Week’s Top Story: Canada’s Real Estate Bubble Eliminated By Data Revision & More Experts See Lower Prices – Better Dwelling Better Dwelling
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China's consumer and factory data miss expectations in July – CNBC
BEIJING — China reported data for July that came in well below expectations as the real estate slump and Covid controls dragged down growth.
Retail sales grew by 2.7% in July from a year ago, the National Bureau of Statistics said Monday. That’s well below the 5% growth forecast by a Reuters poll, and down from growth of 3.1% in June. Within retail sales, catering, furniture and construction-related categories saw declines.
Sales of autos, one of the largest categories by value, rose by 9.7%. The gold, silver and jewelry category saw sales rise the most, up by 22.1%. Online sales of physical goods rose by 10% year-on-year, faster than in June, according to CNBC calculations of official data.
Industrial production rose by 3.8%, also missing expectations for 4.6% growth and a drop from the prior month’s 3.9% increase.
Fixed asset investment for the first seven months of the year rose by 5.7% from a year ago, missing expectations for 6.2% growth.
Investment into real estate fell at a faster pace in July than June, while investment into manufacturing slowed its pace of growth. Investment into infrastructure rose at a slightly faster pace in July than in June. Fixed asset investment data is only released on a year-to-date basis.
“This year, the property market overall has shown a downward trend,” Fu Linghui, spokesperson of the National Bureau of Statistics, told reporters in Mandarin, according to a CNBC translation.
“Real estate investment has declined, and may have had some impact on related consumption,” he said.
Young people’s unemployment climbs
While the overall unemployment rate in cities ticked lower to 5.4% in July, that of young people remained persistently high.
The unemployment rate among China’s youth, ages 16 to 24, was 19.9%. That’s the highest on record, according to Wind data going back to 2018.
Fu attributed the high level of youth unemployment to Covid’s impact on businesses’ operations and their ability to hire.
In particular, he noted how the services sector, where young people typically account for a greater number of jobs, has recovered rather slowly. Fu also pointed to was young people’s current preference for jobs with more stability.
Stable jobs in China typically include those at state-owned enterprises rather than positions at start-ups or smaller companies.
“The national economy maintained the momentum of recovery,” the statistics bureau said in a statement. But it warned of rising “stagflation risks” globally and said “the foundation for the recovery of the domestic economy is yet to be consolidated.”
Analyst forecasts for July were projected to show a pickup in economic activity from June, as China put the worst of this year’s Covid-related lockdowns behind it, especially in the metropolis of Shanghai.
Exports remained robust last month, surging by 18% year-on-year in U.S. dollar terms despite growing concerns of falling global demand. Imports lagged, climbing by just 2.3% in July from a year earlier.
However, China’s massive real estate sector has come under renewed pressure this summer. Many homebuyers halted their mortgage payments to protest developer delays in constructing homes, which are typically sold ahead of completion in China.
The deterioration in confidence puts developers’ future sales — and an important source of cash flow — at risk.
Statistics spokesperson Fu described the construction delays as specific to some regions.
He said the real estate market is “in a stage of building a bottom” and its impact on the economy will “gradually improve.”
Fu said in response to a separate question that once Covid is under control, consumers’ pent up demand will be released.
The potential for a Covid outbreak has remained another drag on sentiment. A surge of infections in tourist destinations, especially the island province of Hainan, stranded tens of thousands of tourists this month.
The local situation reflects the large gap between goals set at the beginning of the year and the ensuing reality. Hainan had set a GDP target of 9%, but was only able to grow by 1.6% in the first six months.
Similarly, at a national level, China’s GDP grew by just 2.5% in the first half of the year, running well below the full-year target of around 5.5% set in March.
When asked about the target Monday, Fu did not discuss it specifically. But he pointed to a host of challenges for growth at home and abroad, including growing uncertainties overseas.
Looking ahead, Fu said China’s economy “still faces many risks and challenges” in sustaining its recovery and maintaining operations in a “reasonable range.”
China’s top leaders indicated at a meeting in late July the country might miss its GDP goal for the year. The meeting did not signal any forthcoming large-scale stimulus, while noting the importance of stabilizing prices.
The country’s consumer price index hit a two-year high in July as pork prices rebounded.
Ahead of Monday morning’s data release, the People’s Bank of China unexpectedly cut rates on two of its lending rates — both for the first time since January, according to Citi.
Why the CRA might owe you money; Airlines continue to deny compensation claims: CBC's Marketplace cheat sheet – CBC News
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Nearly 9 million Canadians have $1.4B in uncashed CRA cheques — could you be one of them?
Good news from the Canada Revenue Agency for a change? Now that’s a treat.
Over the next month, the CRA, Canada’s tax agency, says it will begin sending out reminders to tens of thousands of Canadians to let them know they’ve got money owed to them they haven’t yet claimed.
On Monday, the CRA said it has roughly $1.4 billion worth of uncashed cheques on its books, some of which has been owed as far back as 1998. As of May, 8.9 million Canadians had some sort of uncashed cheque attached to their name. The average amount owed is $158, the tax agency said.
While the CRA handles billions of dollars in taxes and rebates every year, not all of it makes it into the hands of Canadians who are entitled to it, mostly due to people either losing the cheques, or changing addresses, meaning they never received it in the first place.
“We want to make sure this money ends up where it belongs. In taxpayers’ pockets!” the tax agency said.
The CRA said it will soon notify roughly 25,000 recipients of the Canada child benefit and related provincial/territorial programs, GST/HST credit and Alberta Energy Tax Refund if they are owed money, and that another two groups of 25,000 will be notified this November and in May of 2023.
But if you think you may be one of those lucky Canadians, you might want to be a little bit more proactive. Read more
Customers cry foul as Air Canada, WestJet continue to deny certain compensation claims despite new directive
Judging from plenty of anecdotal evidence, flying has been a bit of a headache lately.
Long flight delays and crew shortages have led to mayhem at many Canadian airports.
But a recent Canadian Transportation Agency (CTA) decision was supposed to help clear the air on at least once source of frustration: the rules around flight compensation.
When issuing a decision in a WestJet case on July 8, the transport regulator clarified that, in general, airlines can’t deny passengers compensation for flight disruptions caused by crew shortages.
However, the clarification has only ignited fury for some passengers, including Frank Michel, who was denied compensation by Air Canada, and Jennifer Peach, denied by WestJet, due to crew shortages and constraints and safety concerns.
“It’s insulting,” said Michel of Marquis, Sask.
Under federal rules, airlines only have to pay compensation — up to $1,000 per passenger — if the flight disruption is within the airline’s control and not safety-related.
WestJet and Air Canada each declined to comment on individual cases, but both said they abide by federal air passenger regulations. WestJet said that safety is its top priority. Air Canada said airlines shouldn’t be penalized for cancelling flights for safety reasons.
But Michel says the company isn’t playing by the rules.
“CTA has already made it clear that crew constraints is not an acceptable excuse,” he said. “It’s not a safety issue. It’s a management issue. You have to manage your resources.” Read more
You tip your hairdresser, but what about your mechanic? It might only be a matter of time
You probably tip the person who cuts your hair. Should you do the same for the person fixing your car?
Customers are increasingly seeing a gratuity option on card payment machines in industries where tipping was never previously part of the cost, from auto shops to fast food giants.
The phenomenon, dubbed “tip creep,” is leaving a bad taste for some consumers, who have vented online about being asked if they want to pay an extra 15 per cent or more on top of the price of a takeout pizza, oil change or propane tank refill.
“Tipping is spreading to a lot more places right now, so where we wouldn’t have previously been prompted to tip, now it seems to be a lot more common,” says Simon Pek, an associate professor at the University of Victoria’s Gustavson School of Business who researches tipping practices.
As customers shift away from carrying cash, it’s easier than ever for any business to ask for a little bit of extra money by adding the automatic prompt — what psychologists call a “tip nudge” — to their card payment machine.
Inflation may play a factor, too. Business owners, for example, may see adding a tip button as a way to give in to workers’ demands for higher pay without necessarily affecting their bottom line.
“We’ll still see a lower sticker price, we’ll still buy the product, and then adding 10 to 20 per cent after — it might be frustrating, but people still end up doing it, and that’s often cheaper for a company than having to pay those wages,” said Pek. Read more
Do you have an inflation story to share? Email us at firstname.lastname@example.org
What else is going on?
Cineplex ekes out $1.3M quarterly profit — its first since pandemic began
11 million people saw a movie at a Cineplex location during the quarter, up from 1 million last year.
Polio largely vanished thanks to vaccines. So why is it now back in more countries?
Infections, wastewater samples in U.K., U.S., Israel point to challenges in wiping out virus globally.
Climate change is hurting our mental health. These researchers want to help
Scientists across Canada are trying to learn enough about climate anxiety to prevent and treat it.
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