|Tim Hortons and Burger King shares both jumped on reports that the burger chain is looking to scoop up the Canadian coffee kingpin. The Canadian Press|
Your morning stop at Tim Hortons is about to cost a little more.
The restaurant chain says it plans to raise prices for both coffee and breakfast sandwiches at its Canadian locations starting next Wednesday.
A spokeswoman says a cup of coffee will go up by 10 cents, on average, though the change will vary by region.
The cost for a breakfast sandwiches will also rise in all provinces except Ontario.
The cost of sandwiches, like bacon and egg on an English muffin and the turkey sausage sandwich, will go up 10 cents to $2.99 before tax.
The move comes as Tim Hortons (TSX:THI) says it faces “significantly higher operating costs,” which include higher prices for coffee beans and meat on the commodities market.
Earlier this month, the company’s chief financial officer, Cynthia Devine, hinted that a price increase could be on the horizon after futures contracts for Arabica coffee nearly doubled this year due to various factors, including lack of rain in Brazil.
Tim Hortons locks itself into long-term contracts with coffee suppliers, which gives it flexibility and protection from market fluctuations.
Most of the company’s key coffee deals were negotiated more than a year ago, which has allowed executives to navigate through one of the most volatile periods for coffee prices in recent memory.