Tim Hortons (TSX:THI) is launching its own loyalty rewards program in response to growing competition in the coffee market.
The company has partnered with CIBC for a Visa credit card that accumulates points redeemable at Tim Hortons stores, part of a broader effort to give its customers more incentives.
Chief operating officer David Clanachan says a loyalty program for coffee drinkers who don't want to use a credit card is also in the works.
"We really like the idea of turning over a new leaf and doing it in this controlled format," he said in a phone interview.
"We see this as a big part of our future and this is kind of our first foray down that path."
Some of Tim Hortons' biggest competitors have made loyalty programs a priority.
McDonald's offers a McCafe sticker card for regular coffee drinkers, while Starbucks has both and app and rewards card that gives free drinks and food to frequent customers.
Tim Hortons has grappled with fewer transactions at its restaurants even as fourth-quarter profits increased marginally to $100.6 million in its latest period from $100.3 million a year earlier.
Revenue grew 10.7 per cent to $898.5 million from $811.6 million, the company said Thursday.
CIBC's (TSX:CM) partnership with Tim Hortons materialized as the Canadian bank searched for new incentive programs for its credit card slate. Last year, the bank lost exclusivity for an Aeroplan-branded credit card after more than 20 years.
The Tim Hortons credit card will be available starting in May.
