Tim Hortons Cracks Top Five U.S. Coffee Shops in Zagat

Photographer: Brent Lewin/Bloomberg

A cup of Tim Hortons Inc. coffee and doughnuts in Toronto, Ontario, Canada. Close

A cup of Tim Hortons Inc. coffee and doughnuts in Toronto, Ontario, Canada.

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Photographer: Brent Lewin/Bloomberg

A cup of Tim Hortons Inc. coffee and doughnuts in Toronto, Ontario, Canada.

Americans may be figuring out why their northern neighbors love their double-doubles.

Tim Hortons Inc., which claims to sell eight out of 10 cups of coffee in Canada, including those with two sugars and two creams, broke into the top five of Zagat’s annual ranking of fast-food chains for the first time.

The coffee and doughnut chain, based in Oakville, Ontario, ranked fifth in the “quick refreshment” category in an online survey released today by New York-based Zagat Survey LLC, a unit of Google Inc. (GOOG)

That was up from 22nd last year, and behind Caribou Coffee Co Inc.’s (CBOU) Caribou Coffee, Rita’s Italian Ice, Peet’s Coffee & Tea Inc. (PEET) and Culver’s in the category, Zagat said in a statement. Tim Hortons also came fifth in both service and decor in the survey of more than 10,500 diners. A total of 274 companies were ranked in various categories.

“In my opinion, they’re definitely gaining recognition,” Brian Yarbrough, a restaurant-industry analyst with Edward Jones & Co. said by phone from St. Louis, Missouri. “Is that the coffee? Is that the ice coffees and the smoothies and food all combined? But definitely, when you’re putting up some of the best sales numbers in the industry I’ve got to believe you’re gaining some share.”

Tim Hortons, which has been expanding its menu from its coffee and doughnut staples, has added an average of 69 restaurants a year in Canada compared with 28 a year in the U.S. since entering that market in 1986.

Tim Hortons closed 16 cents higher at C$51.16 in Toronto today and has gained 3.7 percent this year.

The chain, founded in Hamilton, Ontario, in 1964 by the late Tim Horton, who was a National Hockey League player, currently has more than 700 restaurants across 11 states and is in the process of adding 80 to 100 locations before the end of the year.

It has 3,326 restaurants in Canada and sells about 2 billion cups of coffee in North America a year, spokesman David Morelli said by e-mail.

To contact the reporter on this story: Ari Altstedter in Toronto at aaltstedter@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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