Tim Hortons expects labour shortage to ease as feds roll up aid for workers

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Tim Hortons is expecting its labour woes will start to ease as federal government pandemic benefits dry up, an executive at the coffee chain’s parent company said in a quarterly update on Monday.

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Restaurant Brands International Inc., which also owns Burger King and Popeyes Louisiana Kitchen, said labour shortages impacted operations during the third quarter, though Tim Hortons reported sales of $1.8 billion, a year-over-year increase of $254 million that put the chain back in line with pre-pandemic levels.

The Canadian food service and accommodation sector had an all-time high of 89,100 open jobs in the second quarter, according to Statistics Canada, forcing restaurants across the country to cut operating hours, reduce seating or close a few days a week because they don’t have the staff to run at full capacity.

Tim Hortons locations have been spared those sorts of operational sacrifices, but many are still missing up to a third of their pre-pandemic staff and franchisees are “waking up in the morning wondering what (they’re) going to do to cover a shift if someone calls in sick,” said Duncan Fulton, RBI’s chief corporate officer.

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The average location needs about 30 full-time and part-time staff combined.

“A lot of our restaurants are operating at, you know, 20 people,” Fulton said. “It’s the Canadian Tire, and the Shell gas station and the Sobeys grocery store down the street that are all competing for the same pool of labour.”

Fulton said federal aid during the pandemic meant that “a lot of people who benefit from those programs” weren’t applying for retail or food service jobs. Ottawa last weekend ended the Canada Recovery Benefit, which paid people up to $500 per week, in favour of a narrower program that is only available to those out of work due to a regional lockdown.

“I think there is some optimism as we look at government aid programs winding up,” Fulton said, adding that he was expecting an “influx” of workers after the funding expires. “I think it’s actually going to be a great time for workers as they come back to jobs, because there’s a lot of competition to attract them.”

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Their narrative is stale. Perhaps it’s time for them to think of better wages, working conditions and benefits

Judy Fudge

Judy Fudge, a professor at McMaster University’s School of Labour Studies in Hamilton, said the narrative around government benefits and labour shortages shifts the focus to “workers taking the easy way out” instead of looking at the quality of the jobs that go vacant.

“Their narrative is stale,” she said in an email. “Perhaps it’s time for them to think of better wages, working conditions and benefits.”

Fulton, however, said franchisees have been offering a range of incentives, including bonuses for employees who refer a friend, as well as for those who start, and stay, in a job for a certain period of time.

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“There are lots of examples of Tim Hortons owners paying above minimum wage, in many cases by several dollars,” he said. “A hyper-competitive labour market usually results in good wages, good benefits. Then, if you’ve got happily employed folks with limited turnover in your restaurants, that just creates better operations.”

But those higher labour costs could force price hikes for customers.

RBI chief financial officer Matthew Dunnigan told analysts on a conference call that he was expecting “elevated volatility” in the coming quarters that will push the company to “monitor and adjust” prices.

“Pricing is definitely in the conversation,” he said.

Financial Post

• Email: [email protected] | Twitter: jakeedmiston

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