RetailAnalysis
16 February 2017
Burger King and Tim Hortons parent reports strong growth

Restaurant Brands International (RBI), the parent company of Tim Hortons and Burger King, released its Q4 and FY 2016 results. We take a look...

Solid growth in 2016

Following the merger of Canadian coffee chain, Tim Hortons and fast food chain, Burger King, in 2015, Restaurants Brands was formed, and now encompasses over 18,000 restaurants in 100 countries.

For the full year, Restaurant Brands reported strong growth overall with total revenue of $4.15bn, compared with $4.05bn in 2015. The Ontario-based company reported a net income of $345.6m, compared with $103.9m in 2015. 

In Q4, revenue increased by 5% to $1.11bn from $1.06bn in the same period a year ago. Burger King's same-store sales in the US and Canada increased by 1.8% following two negative quarters, whereas Tim Horton's fell by 0.2%, but it had a strong performance for the year with three quarters of positive growth.

International expansion of Tim Hortons

Restaurant Brands continued its expansion efforts by opening 200 Tim Hortons and 735 Burger King locations worldwide, both an increase from 2015. Burger King showed strong growth internationally, reaching 650 restaurants in China, and there was strong demand in India and Korea.

After signing a series of franchise agreements, Restaurant Brands aim to expand Tim Hortons internationally into Mexico, Philippines, and the UK. This expansion could be a significant driver for future growth. 

In the US, Tim Hortons is starting to expand beyond the border states, including Indianapolis and Minneapolis after signing development agreements.

Burger King's continued focus on tradition

Burger King has continued its focus on traditional fast food products to target its main market and provide a consistent message, rather than adding healthier menu options like McDonald's has done, which aim to attract new customers who are health conscious.

In Q4, the fast-food chain introduced the premium-priced Bacon King Burger and BBQ Bacon King, as well as a fried potato and cheese limited-time side product. Limited-time and premium products aim to encourage repeat visits.

Burger King's takeover of French fast-food operator Quick will result in additional locations being added in Belgium and France in 2017.

RBI approached Popeyes

According to Reuters, Restaurant Brands has approached Popeyes Louisianna Kitchen about a takeover offer, which would add another 'Quick Service Restaurant' chain to its portfolio.

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