Tim Hortons To Extend Ice Cream Test Run

Ottawa Citizen:

quotation.jpgIce cream cones are selling like crullers at coffee chain Tim Hortons Inc., which confirmed Thursday that it will extend its test run of the Cold Stone Creamery brand into outlets across Canada.Tim Hortons Franchise

Cold Stone recently opened inside 40 U.S. Tim Hortons locations and six Toronto outlets as part of a joint venture, and the two companies plan to open three more of the co-branded outlets in Halifax and three in Calgary because of strong consumer response, Tim Hortons chief executive Don Schroeder said.

“We want to do the test right across the country to get a feel if this is something to roll out across the system,” said Mr. Schroeder, who said sales from Cold Stone, a subsidiary of Phoenix, Ariz.-based restaurant franchisor Kahala Corp., had a positive impact on same-store sales in the quarter.

“We had originally targeted 50 outlets [in the U.S.] and we are probably going to go beyond that 50. Cold Stone is very satisfied [with the results] and we are very satisfied.” The chief executive said the businesses were complementary: the main Cold Stone traffic happens between 4 p.m. and 10 p.m., a time of day that Tim Hortons has long wanted to lift its sales. Cold Stone’s ice cream is made on site and customers can add candy, fruit and nuts to their order, which is mixed by a server on a frozen slab of granite. It operates more than 1,450 locations in 11 countries including Japan, Korea, China and Taiwan.

Tim Hortons’ shares jumped 7% on Thursday after the country’s largest quick-serve chain reported a 3.7% rise in profit to $77.8-million, or 43¢ a share, in the second quarter ended June 28. That was up from $75-million, (41¢), a year ago. Revenues rose 8.9% to $556.1-million despite a promotion from rival McDonalds despite an April promotion from the burger giant giving away free coffee for two weeks.

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