Tim Hortons raises some breakfast item prices amid wage controversy

Galtero Lara
Enero 13, 2018

"We believe that [Tim Hortons' parent Restaurant Brands International Inc.] will eventually allow some menu price increases and franchisees will make adjustments", Peter Sklar, retailing analyst at BMO Capital Markets, said in a note to investors Thursday.

The chain previously raised prices on some hot beverage and breakfast menu items in August, less than six months ago.

Some, but not all, of the chain's franchisees have said employees will have to cover a larger share of their dental and health-care benefits as well as take unpaid breaks in order to offset the added costs of the province's hourly minimum wage rate increase to $14 an hour on January 1.

"Usually when prices go up, it's not very municipal, it's a large area", he said.

On Wednesday, customer Art Jaszczyk said he visited a Tim Hortons in Markham, Ont., and noticed that his favourite menu item -a bagel sandwich breakfast meal - had gone up from $6.77 to $7 - an increase of 23 cents.

The Great White North Franchisee Association, which represents half of Canadian Tim Hortons franchisees, said it hoped RBI would lower supply costs, reduce couponing or raise prices.

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He says he's happy to pay a bit more, as long as the money helps pay workers the minimum wage increase without clawing back their benefits.

A number of Tim Hortons restaurants have increased prices for some breakfast items, amid growing controversy over some of the coffee chain's franchisees' reduction of staff benefits to offset Ontario's minimum wage hike.

He said stock in Restaurant Brands International (RBI) has come under pressure due to negative media reports related to cost control steps by franchisees, including cutting employee hours, eliminating paid breaks and reducing the subsidy of employee benefits.

"Many of our store owners are left no alternative but to implement cost-saving measures in order to survive", GWNFA said in a statement.

Ontario Premier Kathleen Wynne called the franchisees' move "an act of bullying", while Ontario Labour Minister Kevin Flynn has suggested businesses consider increasing their prices in response to the wage hikes. "These were merely slight menu board adjustments totally unrelated to minimum wage increases", said a spokesperson in an email to CBC News.

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