This is how Tim Hortons is revamping its rewards program, and what it means to you

'We need to get back to basics' at Tim Hortons: Restaurant Brands exec Duncan Fulton, chief corporate officer at Restaurant Brands International, talks about the company's plans to stop same-store-sales slide at Tim Hortons.

TORONTO — Tim Hortons is overhauling its loyalty program after parent company Restaurant Brands International Inc. announced that profits at the coffee chain are down, and its coffee and doughnut giveaways are partly to blame.

Restaurant Brands International Inc. released its fourth-quarter and full-year financial results on Monday, showing Tim Hortons profits were down, with same-store sales dipping 4.3 per cent in the quarter ended Dec. 31. Sales were down even more in Canada, falling 4.6 per cent in the same period.

RBI CEO Jose Cil blamed the decline on the Tims Rewards loyalty program ballooning to 7.5 million members sooner than expected.

“We’ve attracted far more guests to our loyalty program far more quickly than we had planned,” Cil said during a conference call with analysts. “Despite our recent results, we have a clear plan and believe it's within our control to restore Tim Hortons to growth in Canada.” To do so, Cil said RBI will launch a "back-to-basics approach" focused on what Tim Hortons is known for -- coffee, baked goods and breakfast items -- to regain momentum.

Starting Feb. 26, Tims Rewards is changing to what the company calls a points-based system. CTVNews.ca explains what’s changing and how consumers will be affected:

THEN: HOW TIMS REWARDS USED TO WORK

NOW: HOW TIMS REWARDS IS CHANGING

HOW IT’LL WORK

WHAT COULD MY POINTS GET ME:

If Tims Rewards members haven’t registered by April 22 they will only be eligible for a free coffee, tea, or classic doughnut after earning 120 points.

Points expire after one year after you earn them. Tims will also send exclusive offers and birthday rewards to registered members through the new program.

RBI says only 25 per cent of the current 7.5 million members are currently registered.

Despite the upcoming changes, RBI said Tims Rewards is expected to drag down sales for several more quarters.

NEW ROLL UP THE RIM FORMAT

The roll-out of the new loyalty program has pushed back Tim Hortons signature promotion Roll Up the Rim, which runs annually from February to April.

The coffee chain said its iconic contest would undergo a major revamp last year after it failed to boost sales and the company received backlash from environmentalists over its disposable cups.

RBI says a big part of refreshing the promotion will be moving it online. However, Tims has yet to reveal what the new promotion will look like or when it will start.

RBI chief operating officer Joshua Kobza said during the call that the chain wants to give customers time to understand the loyalty program changes before announcing a new Roll Up the Rim format in the coming weeks.

CHANGES IN MILK OPTIONS, COFFEE QUALITY

In addition to the loyalty program changes, RBI said it plans to fix Tim Hortons' sales performance by elevating the quality of its products. This includes offering skim and almond milk to customers, and improving the quality of bread and bacon used in its sandwiches.

Cil said in the conference call that RBI plans to roll out fresh coffee brewers for a better-tasting and more consistent cup of coffee. The technology is in place at more than 2,000 locations and Cil said it will be installed in remaining stores by mid-year.

The plan will also see Tims take a step back from experimenting with new menu items that stray from its "core values." Tim Hortons wiped Beyond Meat burgers from its menu in September, two months after introducing the alternative-protein product at most of its nearly 4,000 locations across Canada.

"These adjustments may seem basic, but that's the point: being the absolute best at the basics that we're already famous for," said Cil.

With files from The Canadian Press