The seemingly terminal decline of Tim Hortons

[Northern Light]

We pay almost everything by CC and cash in hundreds of dollars a a year of PC points thanks to the combination of the CC and frequent shopping at PC branded stores.

I think the key to me, here, is understanding that you're really not saving anything at all.

If PC is writing off an expense of giving you $550 off your groceries, they're raising the price of those groceries in store by $501 to pay for it. (the cost of the reward paid to you, plus the cost of the complex points system and card infrastructure etc.)

There in lies the problem to me; there is no 'free lunch'; what there is, is needless convolution.

 

[PinkLucy]

No, never a free lunch. But so long as these programs exist, we are all paying the costs of inflated groceries ao it becomes a vicious cycle. As you say, the only way around it is to ban them. As it is, I refuse to pay fees on credit cards.

 

[afransen]

I think the key to me, here, is understanding that you're really not saving anything at all.

If PC is writing off an expense of giving you $550 off your groceries, they're raising the price of those groceries in store by $501 to pay for it. (the cost of the reward paid to you, plus the cost of the complex points system and card infrastructure etc.)

There in lies the problem to me; there is no 'free lunch'; what there is, is needless convolution.

I think it is a bit more complex than this. If companies didn't offer loyalty programs (which increase lifetime value of an acquired customer), they would not merely lower prices. They would spend more on customer acquisition and maintain somewhat higher prices to acquire those customers. I'd rather that value accrue to me as a consumer, and not to advertising outlets (notwithstanding our gracious hosts here at UT ). I'm all for lowering permitted interchange fees to something reasonable (<0.25% of transaction). Credit card points should largely go away.

 

[Northern Light]

I think it is a bit more complex than this. If companies didn't offer loyalty programs (which increase lifetime value of an acquired customer), they would not merely lower prices. They would spend more on customer acquisition and maintain somewhat higher prices to acquire those customers. I'd rather that value accrue to me as a consumer, and not to advertising outlets (notwithstanding our gracious hosts here at UT ). I'm all for lowering permitted interchange fees to something reasonable (<0.25% of transaction). Credit card points should largely go away.

An interesting thesis, but I'd have to beg to differ.

When you look at points, and where they're used most............

1) Grocery stores - grocery customers come in (mostly) two types, the read the flyers for the best deal type, and the 'my neighbourhood store' type. Neither of these customers are particularly motivated by advertising, and the grocery industry
outside of flyers, has never been heavy on TV Ads or the like. Notwithstanding modern points systems, all the chains continue to invest in flyers, and I don't see any evidence of shift between traditional advertising costs and loyalty programs, merely an added cost to the bottom line.

2) Airlines - there are only 2 national carriers in Canada of significance, and really one 1 international carrier of significance. In that context and in light of overall air travel costs, I would suggest people rarely accumulate the 'air miles' or equivalent to tip their decision on whether to have a vacation, or which carrier to fly to do so. Instead, they are typically motivated by their desire or need to travel (vacation, work, family) and then simply search out the lowest cost option within their defined parameters (class of tickets, customer experience, travel time/non-stop options).

3) Movies - Who is going to a movie they don't want to see, because they can buy the ticket with 'points'? The deciding factor is the movie, followed by venue preference (location/neighbourhood, screen size, seat comfort etc.) In the context of yet another low competition industry (what non-Cineplex theatre is carrying new mainsteam releases?), where else are you going to go if Cineplex drops 'scene points'? I think they would do better by lowering their prices, and by improving the movie-going experience.

 

[afransen]

You're assuming consumers are rational. There is abundant evidence that humans are not homo economicus. People don't have a bright white line between movies they want to see and movies they refuse to see. They are making consumption choices and may choose to see a film instead of going to a music venue, (or staying in and watching Netflix) etc. as an entertainment choice based on the perceived cost and value. Perceived cost is lower if it uses points. There are movies that are marginal as far as someone would like to see it in theatre vs home release/streaming.

Airlines are highly competitive with small profit margins. Points help to make consumers stickier and more profitable rather than selecting merely on lowest ticket price. Airlines disproportionately are trying to make frequent travelers sticky as this is who tends to be less price sensitive and much higher lifetime value, typically business travelers.

All the major grocery retailers are slimming down flyer distribution, and it is a major cost. I hear ads on radio, see them online, etc. Offering consumers points instead of price discounts induces return trips to spend those points, which leads to habit formation. And points often are redeemed for high margin items (say cosmetics at Shoppers Drug Mart) so the cost to the retailer of offering those points is less than the equivalent monetary discount.

Ultimately, if loyalty programs didn't work, they wouldn't be ubiquitous. Sure, not every consumer will engage in every loyalty program, but all retailers segment their consumers into high (potential) lifetime value segments and target their loyalty programs to make those high value customers stickier and capture greater share of wallet.

 

[Admiral Beez]

Meanwhile, Tims opens their first location in Pakistan:

To be on game, they’ll need to hire primarily white employees who have a poor grasp of unaccented Punjabi or the local language.

 

[Admiral Beez]

Not to get too far off topic but I agree.

I have 15000 points on my Mastercard and that only equates to $100.00 towards the cost of my trip. That is the Aspire World Elite Mastercard.

I have a TD Expedia gold card. I pay $120 a year in annual fees, but in return I get family travel, medical, rental car and cancellation insurance, and some other perks I forget. In 2020 I had a family trip booked to the UK which of course we had to cancel due to Covid, and even though I’d purchased non refundable flights and hotels, TD Visa refunded everything, which enabled us to take a Baltic cruise last summer - booked through TD Expedia for more points. I’ve also used the TD Visa travel insurance when I was in the US and my daughter needed a doctor - all I had to do was call TD Visa and they called ahead to the doctor‘s office to pay the medical bill, no copay or deductible. Last March I was in the UK and caught Covid, so was unable to pass the antigen test to come home - TD Visa refunded all the flight change fees - the extra week in a hotel was on me, but I had a great extra week in London. I also used the card for car rental insurance in the US and UK.

So, I don’t mind the $120 fee, even though I use the card more for the service than points collection. What’s $120, a tank of gas in the car nowadays?

 

[JacindaArdern]

Really the only point of credit cards is to get consumers to consume more and spend more money than they would otherwise, through things like convenience, psychology, and of course borrowing. That's why merchants are happy to pay visa/mastercard commission and banks are happy to spend money on rewards programs. Prices are high because they know shopping is the only hobby for most of us and that we're willing suckers. For that reason, removing rewards programs would still result in no savings to the consumers.

The only way for an individual consumer to "game" the system is to buy only what they need, as old fashioned as it sounds.

 

[Admiral Beez]

Prices are high because they know shopping is the only hobby for most of us and that we're willing suckers. The only way for an individual consumer to "game" the system is to buy only what they need

That's exactly what I do. I think I buy almost nothing most months beyond food, gas and bills. And the occasional part for the 1980s motorcycle... but that's my hobby.

 

[AlbertC]

Coming soon: Four new Tim Hortons Ice Cream flavours based on some classic tastes of Tims including Double Double™ and Boston Cream

/CNW/ - Four new ice cream flavours from Tim Hortons – Boston Cream, Double Double™, Maple Crunch and Campfire S'mores – are on their way to grocery stores...

www.newswire.ca

Coming soon: Four new Tim Hortons Ice Cream flavours based on some classic tastes of Tims including Double Double™ and Boston Cream​

TORONTO, March 1, 2023 /CNW/ - Four new ice cream flavours from Tim Hortons – Boston Cream, Double Double™, Maple Crunch and Campfire S'mores – are on their way to grocery stores across Canada and will be available soon at participating Co-Op, Loblaws (Maxi, No-Frills, Real Canadian Super Store, Provigo, Loblaws Great Food, Fortinos and Your Independent Grocery), Longo's, Metro (Ontario), Sobeys/Safeway and Walmart stores.

Tim Hortons Ice Creams are proudly made in Canada in partnership with the Tillsonburg, Ont.-based ice cream producer Shaw's and are made with 100 per cent Canadian dairy.

The four new addictively delicious Tim Hortons Ice Cream flavours are:

• Boston Cream Ice Cream: Bursting with custard flavour, bites of donut-style pieces, and swirls of chocolate fudge ripple, this new ice cream is sure to capture the hearts of all Boston Cream fans.
  
  
• Double Double™ Ice Cream: Canadians asked for Double Double™ Ice Cream, and Tims listened! Inspired by a true Canadian classic, this ice cream features the rich and smooth flavours of Tims Original Blend coffee paired perfectly with creamy and sweet accents.
  
  
• Maple Crunch Ice Cream: Maple fans will love the rich maple flavour, and the maple-flavoured crunchy flakes and ripple in this new ice cream from Tims.
  
  
• Campfire S'mores Ice Cream: Tims gives an iconic warm and gooey campfire treat a cool twist. Tim Hortons Campfire S'mores Ice Cream features toasted marshmallow-flavoured ice cream, chocolate ripple and crushed Graham crumbs. Plus, 100 per cent of net proceeds will be donated to Tim Hortons Foundation Camps to support youth from underserved communities.

Canadians already love the premium quality and value pricing of Tim Hortons Ice Cream after the launch of the Salted Caramel Iced Capp®, Double Chocolate Donut, Birthday Cake Timbits®, Apple Fritter, and Fruit Explosion Tim Hortons Ice Creams in 2022.

"Canadians will swoon for our new deliciously creamy and full-of-flavour Tim Hortons Ice Creams. I can't wait for Tims fans to try them," said Sourabh Malik, Vice President of Consumer Packaged Goods at Tim Hortons. "But I'm most looking forward to having Canadians join us in supporting Tim Hortons Foundation Camps with every purchase of Campfire S'mores Ice Cream."

Tim Hortons Ice Cream in Salted Caramel Iced Capp®, Double Chocolate Donut, Birthday Cake Timbits®, Apple Fritter and Fruit Explosion flavours are available at grocery stores nationwide.

 

[lenaitch]

Swoon? did the VP used to have a job at Harlequin?

 

[christiesplits]

My office recently relocated next to a Tims so I've been going there more than I did before. The lineups have been outrageous. Often over 5 minutes for a coffee. How common is this at other locations? Or is this just a bigger issue related to the labour shortage?

 

[Undead]

Yeah it takes forever if you're not at the drivethru.

 

[lenaitch]

My office recently relocated next to a Tims so I've been going there more than I did before. The lineups have been outrageous. Often over 5 minutes for a coffee. How common is this at other locations? Or is this just a bigger issue related to the labour shortage?

Very common. There is all sorts of staff covering the drive through and usually one lone staffer covering the counter (often along with other duties). Their metrics have determined that there is higher 'production value' at the window.

 

[afransen]

My office recently relocated next to a Tims so I've been going there more than I did before. The lineups have been outrageous. Often over 5 minutes for a coffee. How common is this at other locations? Or is this just a bigger issue related to the labour shortage?

Order ahead with the mobile app for pickup.