By Tamsin McMahon - Wednesday, November 21, 2012 - 0 Comments
Despite big investments to spruce up stores and expand menus, once-thriving restaurant chains are suddenly struggling to get ahead
Analysts were understandably skeptical this month when Tim Hortons interim CEO Paul House blamed the company’s disappointing third-quarter financial results partly on “capacity issues” at some of its restaurants. Canada’s iconic coffee-and-doughnut chain reported that it’s on track to miss its annual growth target in part because lineups at some of its stores were simply too long. “In some ways, it is not good news, but in other ways, it is good news in the sense that . . . we’ve got lots of business,” House told a conference call last week.
It’s a remarkably positive spin on what has been an off year for the ubiquitous coffee chain. Sales growth at existing Tim Hortons stores has been below two per cent for the past two quarters, while growth of 2.3 per cent at U.S. stores fell well below its target of five per cent. What growth the company has seen has been from customers spending more at each visit, even as traffic to its stores declined. The report wasn’t all bad news. The chain did manage a $105.7-million profit for the quarter, up two per cent from a year ago. Continue…
By John Geddes - Wednesday, September 28, 2011 at 12:10 PM - 1 Comment
Melanie Aitken has taken on everyone from the real estate industry, to credit card companies, to airlines
In Stephen Harper’s Ottawa, it’s not often that a public official makes a sustained splash. The Prime Minister prefers his bureaucrats quiet, diplomats discreet, and even high-level appointees, like Governor General David Johnston, unobtrusive. In this circumspect climate, Melanie Aitken, the commissioner of competition, stands out. As head of the federal Competition Bureau—the independent agency that enforces laws on anti-competitive behaviour—Aitken has taken on everyone from the real estate industry, to credit card companies, to airlines. The bureau has gone from largely invisible to impossible to ignore. “We are trying,” Aitken says, “to increase the accountability of companies that have taken advantage of Canadians, and show that there are consequences.”
Those consequences hit home for many last year when she pressured the Canadian Real Estate Association into opening up its Multiple Listings Service to brokers who don’t charge full-service fees. She is taking Visa and MasterCard before the quasi-judicial federal Competition Tribunal to try to end their practice of forcing merchants to accept all cards, including premium plastic that comes with higher transaction fees. In the telecom sector, Bell Canada agreed to pay a $10-million penalty after Aitken accused the company of advertising lower prices than were available, and she is pursuing Rogers Communications (owner of Maclean’s) over what she calls “misleading advertising” involving a discount cell service.
When was the last time the bureau was fighting on so many fronts? According to John Rook, a competition lawyer at the Toronto firm Bennett Jones, never. “It’s unprecedented,” says Rook, who worked closely with Aitken when she was at his firm, and sometimes takes on cases for her bureau.
By Cigdem Iltan - Friday, August 5, 2011 at 9:00 AM - 0 Comments
A competitive smartphone market is resulting in a lot of lawsuits
Smartphone makers have been duking it out in the courts more than they have on store shelves in the past few weeks, and analysts say sales numbers may explain why. Devices that run Google’s Android platform now outshine Apple’s iPhone: first-quarter market-share estimates this year show Samsung has hurdled to 13 per cent from three per cent last year, while HTC jumped to 10 per cent from six. Some analysts believe the results have prompted Apple to lash out with a series of patent infringement lawsuits aimed at HTC, Samsung and Motorola, the world’s top three Android handset manufacturers.
Apple’s market share rose slightly too, but the tech giant’s third-quarter financial results show that nearly half of its revenue comes from the iPhone. Google chair Eric Schmidt last week came out swinging against Apple, accusing its execs of trying to tangle their competitors in a legal web. “They are not responding with innovation, they’re responding with lawsuits,” he said. “We have not done anything wrong.” But it is in Apple’s nature to be a tough litigator, technology analyst Carmi Levy says. “It would be naive of us to think Apple is running scared and is using courts to protect itself,” he says. During an earnings call last month, Apple COO Tim Cook said: “We have a very simple view here. And that view is that we love competition. But we want people to invent their own stuff. And we’re going to make sure that we defend our portfolio fervently.”
While companies that are assertive in the courts run the risk of diverting attention from the marketing of their wares, the manufacturers involved in the ongoing smartphone patent wars are sophisticated enough to focus on both areas, says Levy. Whether court battles impact innovation may be up for debate, but the power of litigation clearly isn’t: after a U.S. International Trade Commission judge recently ruled that Taiwan’s HTC had infringed on two Apple patents, China’s 21st Century Business Herald reported that two Chinese smartphone makers are considering jumping ship from Android to Microsoft’s Mango Windows Phone 7 operating system, raising the question of whether other companies may eventually follow suit.
By Charlie Gillis - Thursday, December 16, 2010 at 12:40 PM - 11 Comments
Hutterite-run firms don’t pay their workers wages or seek big profits. Competitors say it’s unfair.
Competitive spirit might run through the veins of any good businessman, but a handful of Prairie companies say they can’t win the war against some unlikely rivals in the building supply trade—Hutterite colonists. Frustrated by a steady drift of metal roof and siding orders to Hutterite-owned competitors, building supply companies are pressuring the Manitoba government to take action, arguing the market is tilted in favour of Hutterite enterprises because colony members work for free, and because their firms are exempt from certain taxes.
The Hutterites are an Anabaptist sect whose adherents live communally, sharing resources and property on farming colonies that speckle the southern Prairies and parts of the U.S. plains. For the most part, they’ve coexisted peacefully with neighbours, but tensions began rising in the 1990s, when some colonies turned to commercial enterprises to help support their way of life, raising the unexpected question of whether communal living constitutes an unfair advantage in the marketplace.
By Andrew Coyne - Tuesday, September 14, 2010 at 12:39 PM - 0 Comments
Transit and traffic are emerging as major issues in the Toronto mayoral election, with rival candidates unveiling proposals to replace streetcars, build a tunnel under the downtown, extend subways or add bike lanes, almost daily. It might be of interest, then, to know what the great urbanist Jane Jacobs, patron saint of the Annex, thought about it all. Here she is in an absorbing interview with Reason magazine, from June 2001:
Reason: People complain that suburbanites are too dependent on cars. Yet the newest suburbs — the car suburbs, not the trolley suburbs — are so heavily zoned and so carefully laid out. The uses are segregated so much — you live here, you work there, you shop here, you play there, you go to school over here. If you didn’t have a car, you couldn’t possibly live in the suburbs — because of the way they’re laid out.
Jacobs: That’s right. Your children couldn’t get to school. And they couldn’t get to their dancing lessons or whatever else they do. You’re absolutely dependent on a car. It’s very expensive for people, especially if they need a couple of cars. It’s a terrific burden. It costs about — somebody figured it out fairly recently — it costs about $7,000 a year for one car. That’s a lot of money, you know.
Reason: I’m a five-minute drive from all the shopping I need, but I couldn’t walk it.
Jacobs: Sure, you want to defend the car in those cases. It’s a lifeline. It’s as important as your water tap.
Reason: You aren’t anti-car, are you?
Jacobs: No. I do think that we need to have a lot more public transit. But you can’t have public transit in the situation you’re talking about.
Reason: You don’t literally mean publicly owned transit?
Jacobs: No. All forms of transit. It can be taxis, privately run jitneys, whatever. Things that people don’t have to own themselves and can pay a fare for.
Reason: You’re not an enemy of free-market transportation.
Jacobs: No. I wish we had more of it. I wish we didn’t have the notion that you had to have monopoly franchise transit. I wish it were competitive — in the kinds of vehicles that it uses, in the fares that it charges, in the routes that it goes, in the times of day that it goes. I’ve seen this on poor little Caribbean islands. They have good jitney service, because it’s dictated by the users.
I wish we could do more of that. But we have so much history against it, and so many institutional things already in place against it. The idea that you have to use great big behemoths of vehicles, when the service actually would be better in station-wagon size. It shows how unnatural and foolish monopolies are. The only thing that saves the situation is when illegal things begin to break the monopoly.
Gentlemen, start your jitneys.
By Chris Sorensen - Thursday, July 8, 2010 at 10:40 AM - 0 Comments
Canadian and U.S. airlines are limited to cross-border runs
Irish discount airline Ryanair is advertising flights from London to Frankfurt (Hahn) for the equivalent of about $11, plus fees and taxes. There’s a few catches: one checked bag can cost an extra $38 and the small Hahn airport is over an hour away from the German financial centre by bus.
By Andrew Potter - Wednesday, June 23, 2010 at 8:40 AM - 1 Comment
Soccer is billed as ‘the beautiful game,’ but like any sport it is a partisan affair—and the better for it
The World Cup had an early case of life imitating advertising on Saturday, when England goalkeeper Robert Green let a slow shot from American striker Clint Dempsey skip off his hands and into the net. The goal salvaged a tie for the U.S.A., and the deep meaning of it all could be discerned from the comparative reaction of the two countries’ tabloids.
“Hand of Clod!” screamed at least two London dailies, a reference to Diego Maradona’s infamous handball goal that put England out of the 1986 finals. Across the pond, the New York Post captured the spirit of things with its gloating front page: “USA Wins 1-1”.
By Stephen Marche - Friday, June 18, 2010 at 10:27 AM - 0 Comments
When the U.S. tied England, it was as good as a victory
There is a very small chance that North Korea and South Korea will meet each other at this year’s World Cup. Just thinking about that possibility, however distant, offers a peculiar and dangerous thrill. A game played with a bouncy ball on a field of grass would undoubtedly affect the military situation of East Asia. Politics and football have always tended to mix explosively.
Games have stopped wars, as in the 1967 exhibition game in Lagos, starring Pele, for whom the warring factions in the Nigerian civil war called a 48-hour truce. And football has started wars too, like the 1969 “Soccer War” between El Salvador and Honduras, begun over a qualification game. The World Cup contains many rivalries whose origin, whether on or off the pitch, can be difficult to distinguish. (England and Argentina in 1986 being a prime example.) If war is politics by other means, then football is war by means of a game. The world-historical background to many of the contests on the pitch is one of the most subtle and enduring pleasures of the tournament.
By Martin Patriquin - Wednesday, February 17, 2010 at 1:00 PM - 4 Comments
The story of how the Canadian magazine solved its 90-year-old branding problem
The Beaver is no longer, killed off on its 90th birthday. As of its April issue, the name of Canada’s second oldest magazine has been scrubbed from the masthead, replaced with Canada’s History. Though its staff says the name change is necessary to reflect its evolution—“We’ve become a multi-platform magazine,” says editor Mark Reid—the main reason was to put an end to the snickering, once and for all.
Call it death by double entendre. Rarely has the title evoked only the industrious, slick-haired rodent. The term’s other, more carnal meaning, a slang term for a specific part of the female anatomy, has been a distraction for years, cheapening this earnest, wholesome publication, clogging subscriber spam filters and ultimately hurting its bottom line. “Yes, I like beavers, the animals, just as much as anybody else,” Reid said recently.
“It’s a historic creature, it’s on our nickel, it’s a proud part of the fur trade. But in the 21st century, if you are going to rebrand your entire organization, including all that you do, ‘beaver’ is probably not going to be the word that best speaks to what you do, if you know what I mean.”
By Andrew Potter - Monday, July 20, 2009 at 2:49 PM - 1 Comment
NYT foodie-turned social critic Frank Bruni had a fun piece on Sunday about the…
NYT foodie-turned social critic Frank Bruni had a fun piece on Sunday about the way increasingly sophisticated mass taste is being directed at increasingly low-brow gastronomy. The nadir (zenith?) is the recent comparison of Timbits vs Dunkin’ Munchkins. When rarified taste meets economic downturn, what happens? The only solution is “to apply one’s powers of discernment to doughnuts. To mull the nuances of burritos and cupcakes. To assess rival burgers as if they were rival brasseries on the Left Bank.”
This is not exactly new. One of the funner aspects of the NYC food scene is the rapid but totally preposterous turnover in cool foods. One week it is all about meatballs, then suddenly everyone is into lobster rolls. Lobster rolls? That’s so yesterday, surely you want ramen noodles. Then it’s mini-burgers, then tapas, then cupcakes… on it goes, in a perfect collision of conspicuous consumption and Adam Smith’s observation that the division of labour is determined by the size of the market.
By Jason Kirby - Tuesday, October 14, 2008 at 1:37 PM - 8 Comments
Does anyone else find the following argument scary?
Canada’s banks are supremely healthy, best…
Does anyone else find the following argument scary?
Canada’s banks are supremely healthy, best in the world even, and if we don’t throw them a massive taxpayer-funded lifeline right now, they’re going to be in serious trouble.
That, in a nutshell, sums up the sentiment being voiced by Finance Minister Jim Flaherty, Canadian bank executives and analysts at the moment. All over the world governments are injecting billions, nay trillions, of dollars to prop up their country’s biggest financial firms. The U.S. is buying $250 billion worth of shares in the likes of Citigroup, J.P. Morgan and Bank of America. Britain is shelling out $65 billion to help Royal Bank of Scotland and Lloyds. France is doing it. Germany is doing it. Even educated Swedes are doing it. The fear now is banks in those countries will be able to borrow funds at lower rates than Canadian banks, and that, in turn, will lead to higher borrowing costs and put Canadian businesses at a competitive disadvantage.
By Andrew Coyne - Monday, April 28, 2008 at 10:12 AM - 0 Comments
In the wake of Toronto’s fifth transit strike in 19 years, we may expect…
In the wake of Toronto’s fifth transit strike in 19 years, we may expect a groundswell of support for “declaring transit an essential service,” ie taking away transit workers’ right to strike.
As appealing as this is, given the union’s behaviour (union leader Bob Kinnear’s professed reason for giving next to no notice of the strike — that the public would open a can of whupass on his members — for once has the ring of truth), it will achieve precisely nothing, or about as much as that other post-strike demand, that the union “apologize.” It won’t put an end to strikes, for starters: making strikes illegal, at least in this country, only brings on illegal strikes. The transit workers’ last walkout was illegal, as was the last teachers’ strike.
But even if it did achieve the goal of ending service disruptions, all that would ensure was uninterrupted TTC service: slow, infrequent, obstructive (Toronto is the only city in the world where traffic improves in a transit strike, since the streetcars are no longer blocking both lanes), and unpleasant.
If we really wanted to release the city from bondage to periodic transit strikes, and at the same time do something about the TTC’s appalling regular service, there’s a simple solution: end the transit monopoly that gives rise to both. Do what cities around the world have done — allow competition on the roads. As I argued in this 2006 piece,
if we were really serious about transit, if it is as vital as we all say it is, if we wanted to make riding the bus such a delightful experience that passengers would give up their beloved cars for it, is this the model we would choose — a monolithic, state-owned, vaguely Stalinist monopoly?
UPDATE: The C. D. Howe Institute’s Bill Robson makes much the same argument, and is echoed in this National Post editorial.