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Winnipeg Free Press - PRINT EDITION

Tim's, McDonald's breakfast war heats up

By: Hollie Shaw

Posted: 01/25/2010 1:00 AM | Comments: 0 (including replies)

TORONTO -- Tim Hortons has fired off another round in the breakfast war among Canada's quick-service giants, introducing its own version of rival McDonald's Egg McMuffin breakfast sandwich.

Tim Hortons, which gave McDonald's some serious competition in the breakfast segment in 2006 when it began offering a hot morning sandwich on a baked biscuit or a bagel, has avoided selling an egg sandwich on an English muffin, which has about half of the calories of a bagel, until now.

Canada's biggest coffee chain has seemingly triumphed in the breakfast sandwich segment over competitors McDonald's and Starbucks with a 51 per cent share in the category, but market researcher NPD Group Canada says consumers still buy one in four breakfast sandwiches in Canada on an English muffin.

"We initially came out with a homestyle biscuit (breakfast sandwich) to differentiate us from the competition," said Tim Hortons spokesman David Morelli.

"This was a natural extension of our line. We want to give our customers choice, and these are the healthiest option among our breakfast sandwiches."

Tim Hortons is launching the sandwich with a promotion, selling it at $1.99 for a month before returning to the regular price of $2.59.

The move comes nine months after McDonald's offered its reformulated "premium roast" coffee in Canada and gave it away to customers for free for two full weeks, no other purchase required.

While not initially direct competitors when Tim Hortons and McDonald's both began operating in Canada in the 1960s, the two quick-service giants have been encroaching upon each other's traditional turf for more than a decade, with Tim Hortons evolving from a coffee and doughnuts chain into a meal and sandwich destination. With close to 3,000 restaurants in Canada, it overtook McDonald's in 2002 as the country's biggest quick-service restaurant chain.

McDonald's has also broadened its menu options considerably and has opened 72 McCafes, which sell espresso drinks and other specialty coffees, in a test market in eastern Canada. There are no plans as yet to roll out McCafes to the remainder of Canada. McDonald's has targeted the so called "better for you" quick-serve dining offerings of Subway and Tim Hortons by introducing grilled chicken sandwiches, wraps and salads to complement its core offerings of burgers and fries. Last year, McDonald's launched a "dare to compare" nutritional calculator so consumers could cross-reference the nutritional breakdown of its menu items with that of other chains.

"They are both incredibly successful strong operators, but for very different reasons," Luke Sklar, partner at Toronto-based market research firm Sklar Wilton & Associates, said of the two chains. "I think of Tim Hortons as a marvellous executor and operator, but I do not think of it as strategic the way I do McDonald's. I think that McDonald's is the turnaround of the decade by getting back to its original mantra of quality, service, cleanliness and value, and it also upgraded its image, both internally and with its customers."

-- Canwest News Service

Republished from the Winnipeg Free Press print edition January 25, 2010 B4

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