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Tim Hortons sales barely budged in the latest quarter as the iconic Canadian coffee chain continues trying to repair its reputation following sustained criticism over its use of the Temporary Foreign Worker Program.

Parent company Restaurant Brands International reported that Tim Hortons generated roughly US$2 billion in system-wide sales during the second quarter, essentially unchanged from the same period last year.

Comparable sales increased just 0.1%, a sharp slowdown from the 3.4% growth recorded a year earlier.

The result also badly trailed RBI's Burger King business, where comparable sales jumped 8.6% during the same period.

RBI CEO Josh Kobza blamed the disappointing Tim Hortons performance on a promotional calendar that failed to generate the growth executives expected.

“Our calendar didn’t drive the growth we’ve come to expect from Tims and was unable to lap last year’s major platform launches,” Kobza told analysts, according to The Canadian Press.

But the sales slowdown comes as Tim Hortons has been dealing with a separate challenge to its brand in Canada: mounting public anger over the use of temporary foreign workers at its restaurants while Canadian young people struggle to find entry-level work.

The backlash became significant enough that Tim Hortons announced in May it would scale back its reliance on the Temporary Foreign Worker Program and launch a campaign to hire 10,000 local workers.

Tim Hortons claims more than 95% of its approximately 100,000 restaurant employees are hired locally and fewer than 5% are employed through the TFW program. 

Those concerns are playing out against a difficult job market for young Canadians.

Statistics Canada reported that unemployment among Canadians aged 15 to 24 stood at 12.7% in June. Although that was down from earlier in the year, it remained well above the 10.8% average recorded from 2017 through 2019.

Even the federal government has acknowledged the connection between high youth unemployment and concerns about Canada's temporary worker programs. Immigration officials told a parliamentary committee this year that “unsustainable growth” in temporary workers and concerns about youth unemployment were among the reasons Ottawa introduced measures to reduce temporary-worker volumes.

Executives at Tim Hortons are now counting on another round of promotions to revive growth, including new breakfast products and a Harry Potter-themed campaign.

Whether new doughnuts and colour-changing cups are enough to bring Canadians back to the counter remains to be seen.