Tim Horton's Raising Prices: Others Might Follow.

In an attempt to curb the effects of price inflation on its key inputs, Tim Horton's (TSE:THI) is increasing the prices that consumers will pay for its basic products. The company has begun displaying signs at most of its stores declaring that the price increases will be effective April 11th.

Interestingly, the company has yet to state how large the price increases will be, but they have assured their customers that they will be reasonable, and that their products will still represent a good value for customers. To be sure, considering most chains charge more for their cups of java, the company does have some room to increase prices. In addition, like any good business with a valuable brand name, Tim Horton's will surely be able to increase prices while not significantly altering the loyalty of their customer base. 

The primary reason for the price increase has been the spike in arabica coffee, the main bean that Tim Horton's uses to brew its iconic cup. To be sure, it is up more than 80 percent since June of 2010! And even Starbucks (NASDAQ:SBUX), already known for selling an expensive cup, has stated that it has not ruled out raising prices to recoup the increase in coffee bean prices.

For Tim Horton's, it is not at risk of losing significant market share from this move, so it is a wise choice for their intelligent investors. Starbucks, on the other hand, has said that it will not raise prices at the moment in fear of losing customers... Tim Horton's shareholders should be proud of their entrenched brand value that allows such prices increases.

Happy Investing!

For more information, check:

(http://www.cbc.ca/news/business/story/2011/01/27/starbucks-coffee-prices.html).

Coffee in the Desert: Tim Horton's Expanding to Middle East.

Canada's very own Tim Horton's (TSE: THI) will be commencing some rather large expansion plans into the Middle East beginning this year.

There will be as many as 120 multi-format Tim Horton's restaurants opening up in association with Dubai-based Apparel Group. Five of the restaurants will be started in 2011. The 120 possible locations will be opening in the United Arab Emirates, Qatar, Bahrain, Kuwait, and Oman.

For shareholders of Tim Horton's this should be a good thing because the company will not actually be using its own capital or cash for the expansion. Apparel Group of Dubai will be financing the expansion and Tim Horton's will be receiving a royalty, or percentage of sales, in return for their branding and products. Essentially, it is a low risk, potentially high-reward scenario for Tim Horton's.

Of course, Tim's has plenty of room for expansion in the United States, where they have already been experiencing some troubles as stiff competition from Dunkin Doughnuts and McDonald's gives them a run for their money. But nonetheless, as a low-risk way to expand into a diverse market, it is a good strategy. The company will, however, have to make some definite adjustments if they hope to succeed in a very different culture. Apparel Group thinks that they can provide Tim Horton's with this needed expertise.

More on this story:

http://www.timhortons.com/ca/en/about/news.html?c=195616&p=irol-news&nyo=0