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business newsTim Horton's, Cold Stone Join Coronary-Inducing Forces
By
Scott Reeves Feb 06, 2009 12:30 pm
Brief scrutiny of today's headlines.
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The planned test of the newly combined Tim Horton's (THI) and Cold Stone Creamery stores is an attempt to increase store traffic and boost sales by offering a menu that appeals to buyers at different times of the day.
Tim Horton's sells most of its coffee, doughnuts and breakfast food early in the day; Cold Stone generates most of its ice cream sales in the evening. Combining the menus might cut costs by offering everything from breakfast to after-dinner treats under one roof. Such a combination could also be a hit at highway locations.
The test marketing will include 50 existing stores of each brand in Michigan, Ohio, Rhode Island, Maine, Connecticut and western New York. Tim Hortons operates about 3,300 restaurants in the Northeastern US and Canada while Cold Stone Creamery has about 1,450 outlets in 11 countries.
This is a familiar theme for Kahala, a privately held company that franchises quick-service restaurants, including Cold Stone Creamery, Blimpie, Ranch1, Great Steak, Taco Time and Samurai Sam’s. It’s not difficult to imagine a food court made up of nothing but the company’s brands.
Last year, Kahala acquired Cereality. The press release announcing the deal is a little over the top, proclaiming that Cereality is “a new concept…specializing in creating a unique and entertaining experience around the American ritual of eating cereal.” Bet you didn’t know there was an American ritual of eating cereal. Entertaining? Here’s betting your mother said something about not fiddling with your food.
Extending a menu to make a store a destination for more hours each day isn’t new, but it’s a winner - though the combination of doughnuts and ice cream sounds like a prelude to calorie hell. But if the combination of Tim Hortons and Cold Stone Creamery works, it could be a sweet dream for investors.
No positions in stocks mentioned.
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