July 13 (Bloomberg) -- Dunkin’ Donuts Inc. took to the streets as Tim Hortons Inc., the largest fast-food chain in Canada, opened its first stores in New York City at former Dunkin’ Donuts locations.

Street teams staked out eight new Tim Hortons stores in New York today, handing out dollar-off coupons redeemable at Dunkin’ Donuts, David Puner, a company spokesman, said. The 12 new Tim Hortons stores, run by franchisee Riese Organization, occupy onetime Dunkin’ Donuts locations that closed July 10, including shops in Pennsylvania Station and Times Square.

Tim Hortons, best known for its coffee and doughnuts, is pushing into the U.S. fast-food market after closing about 15 locations in New England last year. Its U.S. business posted an operating loss of C$600,000 ($520,398) in the quarter ended March 29, narrower than the C$2.9 million loss a year earlier.

“We’ve been very focused on the opportunity of being able to take the Tim Hortons brand to the people in New York City,” David Clanachan, the chain’s chief operating officer, said in a phone interview yesterday. “New York customers are among the most savvy retail customers in the world.”

The new store at 50th Street and 7th Avenue surprised some who had frequented the Dunkin’ Donuts there. Dan Feliciano and Bobby Lauria, both project managers at Barclays Capital, went to Dunkin’ Donuts “at least twice a day,” according to Feliciano.

Neither Feliciano nor Lauria had heard of Tim Hortons before their visit. They said they were pleased with the coffee.

‘Looks Appetizing’

“It’s better than what I expected,” said Lauria, who ordered an espresso. “The food looks appetizing, so we’ll be trying that out too.”

The 12 new stores include 10 in Manhattan and 2 in Brooklyn, the company said today in a statement. Dunkin’ Donuts had 341 stores in New York City as of the end of 2008, according to Puner.

Tim Hortons, based in Oakville, Ontario, rose 16 cents to C$28.63 at 4:10 p.m. on the Toronto Stock Exchange. The shares have fallen 18 percent this year.

Dunkin’ Donuts, based in Canton, Massachusetts, is a subsidiary of Dunkin’ Brands Inc., whose owners are Bain Capital LLC, Carlyle Group and Thomas H. Lee Partners LP.

To contact the reporter on this story: Laura Myers in New York at lmyers4@bloomberg.net

Last Updated: July 13, 2009 16:36 EDT