A public spat with some of its franchisees and outrage over its response to minimum wage hikes seems to have made a dent in Canadians’ much-publicized love for Tim Hortons this year, as the iconic coffee and doughnut chain has plummeted on an annual ranking of brands by market research firm Leger.
Every year, Leger tabulates information on the reputations of various brands that operate in Canada, and tabulates what consumers think of them. This year, between Dec. 19 and Jan. 29, the company surveyed approximately 2,100 English- and French-speaking Canadians, aged 18 or older, for their views on 241 different brands that operate across the country.
One of the biggest surprises in the ranking was the changing fortunes of Tim Hortons. The chain was ranked fourth overall in 2016, but for this year’s ranking it plunged all the way to 50th.
The company openly squabbled with some of its franchisees for much of 2017 over cutbacks and other cost increases, something which has clearly started to influence its customer loyalty.
But another major factor seems to have been the story first reported by CBC News that some owners were cutting back on employee hours and other benefits in response to hikes in the minimum wage.
“Tim Hortons, a perennial top five brand that we’ve previously believed impervious to issue, has fallen mightily in the court of public opinion,” said Rick Murray, managing partner and chief digital strategist with public relations firm National, which also worked on the ranking.
Leger’s Chris Bourque added that “Most of us would think this company would be forever in our top five … or at the worst, our top 10.”
“The minimum wage war has only one victim and it’s the corporate giant,” Bourque said.
The Tim Hortons brand is owned by U.S.-based Restaurant Brands International, which took over the chain in 2014. The marriage has had its ups and downs since the start, but decidedly more of the latter of late.
Since October, Restaurant Brands’s stock has lost about 16 per cent of its value, including another two per cent on Thursday alone.
David Baskin, president of Toronto-based money manager Baskin Wealth Management, said Restaurant Brands “has a reputation for being a vicious cutter of costs,” something he worried from the start may not play as well in the Canadian market.
“In Canadian corporate culture,” he said in an interview Thursday, “the corners aren’t quite as pointy.”
Baskin, who doesn’t own the stock, said the drop on the rankings will be a concern to the company only in as much as it impacts their sales and profits. The company has now posted lower sales for five quarters in a row, a previously unimaginable trajectory.
“There’s a lot of places you can go for a coffee and doughnut,” Baskin said. “So if a company like Tim Hortons with that iconic status starts to lose that, clearly that’s something investors should be worried about.”
The good news, from Tim Hortons’ perspective at least, is that its fate in the eyes of consumers has by no means been sealed.
Murray singles out Samsung, which struggled with its own scandal involving exploding batteries on its phones but clawed its way back, as a model to emulate. After taking a tumble to 24th place in 2016, Samsung was ranked as the 5th best brand in Canada in Leger’s report this year.
“Brands that went through prolonged and very public crises in the past few years have seen the public’s faith and respect in their brands rebound to pre-crisis levels,” Murray said.
Leger’s survey found that Google, Shoppers Drug Mart and Canadian Tire were the three most respected brands in Canada. It’s the sixth consecutive year that Google has topped the ranking.
The rest of the top 10 included:
- Kellogg Canada Inc.
- Campbell Company of Canada.
Those polled for the survey were members of Leger’s existing online database of 400,000 Canadians.
The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.