Tim Hortons to Close Some Stores in RI, CT and Maine

Tim Hortons to Close Some Stores in RI, CT and Maine

The announcement by Tim Hortons to close stores in the New England region came as part of their reporting of third quarter sales.  The report was generally rosy, but in New England where Hortons is in a battle with Dunkin' Donuts for every cup of joe, jelly donut and bagel sale their results were not impressive.

According to Tim Hortons:

Average annual unit volumes for standard restaurants in the Providence and Hartford markets were approximately half of other core markets in the U.S. Collectively, the restaurants that are closing had a negative impact of about $4.4 million on operating income year-to-date to the end of the third quarter in the U.S. segment, excluding the asset impairment charge. We expect this decision to contribute directly to earnings improvement in the U.S. segment in 2011 and we also plan on reinvesting a portion of our savings from these closed restaurants into core growth markets to increase our advertising and marketing scale. 

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The news is also good for McDonalds which continues to put price pressure on Dunkin' with its lower-cost flavored coffees.