Second Cup should have it all. They’ve got pretty good locations, a neat name and they’re Canadian. Why is the Second Cup the second choice of so many coffee drinkers? Today Second Cup Ltd. suspended its quarterly dividend to refocus on growing the business. Second-quarter sales and earnings have been going backwards. Sales fell 3.9 percent to $45.8 million, and comparable cafe sales declined 5 percent in the three months ended June 28. Yes there’s competition but coffee drinkers might well agree that Second Cup has let Tim Horton’s eat its lunch. The secret is better coffee and better sweets. Starbucks has good coffee but its muffins aren’t anything to write home about. Horton’s has been smart to offer a lot more food than the others while talking up its coffee. It seems to have worked. Another perspective is had by noting that Second Cup is a largely franchised business and frankly that can make it hard to sustain a high standard across the whole chain.
