Week of Aug. 16, 2010

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Tim Hortons Profits Up
Oakville, Ont.-based Tim Hortons Inc., has announced its best three-month sales performance in Canada for several quarters, with a 21-per-cent rise in profits to $94.1 million, up from $77.8 million, in the third quarter, on a sales gain of seven per cent, rising to $639.9 million. Also announced, was the sale of its 50-per-cent interest in Maidstone Bakeries of Brantford, Ont., to joint-venture partner Swiss-based Aryzta AG, for $475 million, after Aryzta enforced a contract provision forcing Tim Hortons to buy or sell the holdings. The proceeds from the sales are expected to be returned to shareholders, CFO Cynthia Devine told the Canadian Press.

Canadian same-store sales in its more than 3,000 locations were up 6.4 per cent in the quarter, while growth of the 500 U.S. locations was slower, up 3.1 per cent. Tim Hortons will expand its plans for up to 60 co-branded Cold Stone Creamery locations, adding the ice-cream parlour to another 20 to 25 Canadian stores. Tim Hortons currently operates 63 co-branded locations in Canada and 70 in the U.S.

According to CP, president and CEO, Don Schroeder said the Maidstone bakery was of “much greater economic value” to Aryzta, which provides specialty baked goods to restaurants around the world. “Because of the international nature of this relationship, the value we put on the facility was greatly different than what our partner Aryzta was able to put on it,” he is quoted as saying to the press agency.

Swiss Marché Restaurants Re-enters Canada
Switzerland-based, Marché Restaurants Schweiz AG, with 122 locations worldwide, has re-entered the Canadian market with the opening, last Friday, of its first new 15,700-square-foot European market garden restaurant in Toronto’s Brookfield Place. Ironically it’s the same Yonge St. and Wellington St. location that once housed the flagship Marché, previously owned by Richtree. The company has now moved to a new location a few blocks north on Yonge Street to the Eaton Centre. Marché CEO Oliver Altherr told the Toronto Star this is Marché’s largest location in the world, and he’s not worried about the rivalry or potential for confusion among market-restaurant customers. “We are very well known in the Canadian market,” he said. “They like our style, the European flair. The Canadian people like our product, and we want to build up several restaurants — between six and 10. We’ve made a lot of changes to our concept over the last few years,” he added, noting the focus on fresh, handmade, organic and original ingredients. Servings will be priced between $4 and $12, depending on ingredients and size.

The former Marché Canadian franchisee, Jorg Reichert, separated from Mövenpick (the original owners of Marché) in a highly public, rancorous, dispute over U.S. expansion plans. He was later forced out of Richtree, the company that held the Mövenpick franchise rights, in a flurry of lawsuits. A year later, Richtree filed for bankruptcy protection from creditors and emerged under the new, present, owners, Catalyst Capital Group Inc., Irvine, Calif. and Vancouver.

Sales Down at Wendy’s and Arby’s
Atlanta-based Wendy’s/Arby’s Group Inc., continues to report negative sales trends at both brands during the second quarter, with same-store sales down 1.7 per cent at Wendy’s and down 7.4 per cent at Arby’s. The company reported a 28-per-cent decline in net income, to US$10.7 million, compared with US$14.9 million in the same quarter a year ago. Quarterly total revenue fell four per cent to US$877 million. The company operates or franchises more than 10,000 restaurants. The company plans to focus on a value marketing program, starting in September, when it will roll out 99-cent limited-time promotions for Frosty treats and a new menu at Arby’s, featuring 30 items for under US$3, including a roast beef deluxe sandwich deal for $2.99, as well as five new sandwiches, including one made with Angus beef and sliced in-store. Wendy’s will be expanding its breakfast menu test, now available at some 30 restaurants, in three markets to 150 more restaurants by the end of August and another 100 stores by the end of the year.

Anti-HST Petition Sets Precedence in B.C.
British Columbia’s acting chief elections officer announced last week his agency has upheld a more than 700,000-signature strong petition that demands the government work to reverse the controversial harmonized sales tax (HST), opening up the possibility for a new vote in the legislature or a referendum. According to The Globe and Mail, the province’s acting chief elections officer announced the victory in a letter to the petition’s chief proponent, former B.C. premier, William Vander Zalm, but added that he would take no further steps on the matter until a court action against the petition is resolved. The judicial challenge to the anti-HST petition was filed by a group of businesses representing some of B.C.’s biggest industries, CBC News reports. Vander Zalm is disappointed in the delay but pleased that the petition was upheld. “It did pass, so I am extremely happy about that,” Zalm told reporters. “It made history.” The Canadian Restaurants and Foodservices Association (CRFA) has expressed concern over the new levy, too. In fact, a recent CRFA survey of foodservice operators found that, on average, 10 per cent of respondents reported a decline in sales compared to the same period last year, before HST had been implemented.

McDonald’s “Blowing Away” Sales Projections
McDonald’s Corporation, Oakbrook, Ill., has reported its highest monthly same-store sales gain, since January 2009, with sales in U.S. restaurants, open at least a year, up 5.7 per cent in July. In Europe, numbers have risen 5.3 per cent and sales in Asia/Pacific, Middle East and Africa are up 10.1 per cent — sales have also risen seven per cent globally. System-wide sales increased 6.8 per cent, or 8.3 per cent in constant currencies for the month. U.S. business momentum was attributed to the warm weather led by beverages, including the recently launched McCafé Real Fruit Smoothies and Frappes, along with value-based drinks. Core products, like McDonald’s all-day, everyday value menus were also key drivers for the month. Don Thompson, McDonald’s president and CEO, told analysts smoothie sales have been “blowing away the high-end projections.”

Canadians Concerned About Food Safety
An Ipsos-Reid poll conducted for Postmedia News, shows 77 per cent of Canadians were either “very” or “somewhat” concerned with food safety, an increase from 66 per cent in 2007. Overall, 87 per cent of respondents trust food from Canada more than food from abroad, while 85 per cent of respondents make an effort to buy locally grown and locally produced food. Although most Canadians prefer to eat local foods, and 70 per cent are willing to pay more for it, 37 per cent believe Canadian food is more expensive than imported food. For more information, click here.

Customer Loyalty Programs Build Restaurant Business
Customer loyalty programs are the “key driver of restaurant business,” according to a new study released by the National Restaurant Association, Washington. The first-ever in-depth loyalty study of NRA members found 77 per cent of respondents believe loyalty programs helped drive business during the economic downturn. What’s more, nine out of 10 respondents said loyalty programs give them a competitive advantage. “This new research clearly shows the value of operating guest loyalty programs and offers great insight into loyalty strategies,” Hudson Riehle, senior vice-president of the Research & Knowledge Group said in a press release. For more information, click here.

Technomic Releases Beverage Trend Report
Consumers are apt to be influenced by the power of suggestion when it comes to ordering non-alcoholic beverages at foodservice operations, according to the “Beverage Consumer Trend Report” recently released by Chicago-based research and consulting firm Technomic. More specifically, 23 per cent of respondents say they would consider ordering a beverage they’d never had before, if the waiter recommended it. And, those statistics increase among the “heavy beverage users” surveyed, 30 per cent of who agreed a suggestion would impact their purchasing decision. “This likely indicates these consumers are more open to trying new beverages overall and suggests operators may be able to use server recommendations to market new, limited-time offers or seasonal beverages toward this group,” explains Darren Tristano, executive vice-president at Technomic. The study also found the number of consumers buying just beverages at fast-food restaurants is on the increase, with 36 per cent of respondents saying they have visited a quick-service restaurant only to buy a drink, up from 24 per cent in 2008. For more on this study, click here.

Eat Smart! Recognizes Brampton Civic Hospital
Brampton Civic Hospital’s cafeteria, operated by the hospital’s foodservice partner, Marek Hospitality Inc., has been recognized for exceptional nutritional standards by Ontario’s healthy workplace program, Eat Smart! The award was presented to Marek Hospitality Inc., by a member of Peel Public Health at Brampton Civic Hospital last week. It recognizes the variety of lower fat and nutritious food choices available on the menu as well as the ability to accommodate requests for modifications and substitutions. The presentation makes Brampton Civic Hospital the 14th workplace in the Peel region to receive the honour. “We are pleased to support the hospital by providing visitors, staff and volunteers with nutritious options,” says Sanjiv Seth, director of Marek Hospitality Inc. “We have put a great deal of effort into promoting health and wellness at the cafeteria.” Eat Smart! is supported by the Nutrition Resource Centre of Ontario — an initiative of the Ontario Public Health Association and is run by local public health units across Ontario.

Cintas Expanding Eco-Friendly Hotel Apparel Line
Cintas Corporation, Chicago, will be expanding its 24 eco-friendly apparel options to 35 styles in September, adding garments for doormen, event staff, housekeeping and more. Last week, it announced the availability of a new eco-apparel option for the housekeeping department. The new recyclable polyester fabric being used is made from plastic bottles diverted from landfills, broken down into polyester fibre and woven into wearable fabric. Approximately seven bottles are recycled in the construction of each Velocity uniform garment. “Eco-apparel is no longer an option just for the front desk. When a hotel selects eco-friendly fabrics, housekeepers know they are doing something to benefit the Earth,” Todd McKeown, vice-president of hospitality at Cintas, said. “The owners appreciate knowing that by outfitting one of their largest departments in eco-friendly fashions, they’re enhancing both the appearance and sustainability of the brand.”

IFMA Foodservice Forecast & Outlook to Take Place in Chicago
The International Foodservice Manufacturers Association (IFMA) will present its all-day 2010 Foodservice Forecast & Outlook Conference Sept. 24 at the Donald E. Stephens Center near Chicago O’Hare International Airport. IFMA has engaged the Chicago-based foodservice industry consulting firm Technomic, Inc., to develop and field a timely survey covering key issues impacting foodservice manufacturers. Results will be reported during the seminar. Other panellists include: Jim DeVos, vice-president, Marketing and Strategy, Morrison Management Specialists; Linda Recine, purchasing manager, Princeton University; and Arjun Chakravarti, PhD., professor of Economics at the Illinois Institute of Technology’s Stuart School of Business, who will present an economic outlook for the next 18-24 months. For more information, click here.

Construction Begins on $150M-Boutique Hotel and Condo in T.O.
Construction has begun on a $150-million boutique hotel and condominium project in the heart of downtown Toronto, at 56 Blue Jays Way. The project, named Bisha, is led by Charles Khabouth, Canada’s largest nightclub operator, and his INK Entertainment, in partnership with Lifetime Developments, and its principals, Mel Pearl and Sam Herzog. “We want to be able to have the hip factor of a boutique hotel but with the attention to detail of a Four Seasons,” Khabouth told the Toronto Star. “It all starts with the doors. That’s the first thing people see. Impressions count.” The new hotel will have two themed floors: a black and red themed Rock and Roll floor and a Hollywood Floor with a Beverley Hills theme. “Like his clubs, there will be a huge amount of space — 30,000 square feet — devoted to amenities, including food and beverage and a fitness centre,” said the Toronto Star’s Tony Wong. The 41-storey development will include 332 condo units, selling from $300,000 to $1,500,000. For the complete story, click here.

DirectCash Income Fund Announces Acquisition
Kicking Horse Mountain Resort, Golden, B.C., has opened its fourth Alpine Bowl with more than 15 new advanced and expert skiable chutes known by local mountain enthusiasts as ‘Super Bowl.’ The opening marks the resort’s 10-year celebrations for the winter season of 2010/11.
“This opening is a perfect lead-in to the 10 years of Kicking Horse Mountain Resort celebrations while continuing to demonstrate the resort commitment to improving the overall guest experience,” reads a company press release. “The terrain in Super Bowl has previously been referred to as some of the ‘best high-alpine terrain found anywhere.’” The project also includes a new summer hiking trail along the Bowl Over ridge to the Super Bowl saddle.

HAC’s Green Key Eco-Rating Expands to 1,500 Hotels
The Hotel Association of Canada (HAC), Ottawa, has announced more than 1,500 hotels are now participating in the Green Key Eco-Rating Program. The announcement comes after U.S. properties Hyatt Hotels & Resorts, Accor North America, MGM Resorts International, Fairmont Hotels & Resorts and Carlson signed up for the program. “Our new alliance with the American Hotel & Lodging Association, in addition to our new hotel brand agreements, has solidified Green Key’s presence in the United States,” said HAC’s Tony Pollard. “Our industry’s commitment to improving environmental performance has always been outstanding, and the Green-Key program has been an important tool for hoteliers in achieving their goals.” Green-Key member properties are listed on greenkeyglobal.com for the benefit of environmentally conscious travellers. Green-Key rankings are recognized by major travel services, including CAA/AAA, Travelocity, Expedia and tourism organizations.

Choice Opens New Ascend Hotel in Moncton, N.B.
Choice Hotels International, Inc., Silver Spring, Md., has added the Chateau Moncton, an Ascend Collection hotel, in Moncton, N.B., to its franchise system. It’s one of 31 new properties franchised by Choice during July in 11 U.S. states and five other countries. Ascend Collection is a membership of historic, boutique and unique hotels giving guests an authentic experience in an upscale hotel with a strong local identity. This Moncton hotel, located near the city centre, offers complimentary deluxe continental breakfast, wireless high-speed Internet, a business centre, weekday newspapers, a fitness centre as well as banquet and meeting space.

 

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