The vending and automated retail industry continues to show signs of recovery following a challenging two years, with almost 16% growth reported in the sector from 2021 to 2022, according to new research from AVA: The Vending & Automated Retail Association.
The findings from the AVA’s annual Census for 2022, which consists of submissions from the operators of thousands of machines around the UK, also highlighted the continued growth of cashless vending technology and micro-markets as the industry demonstrates its ability to diversify in order to meet the changing needs of consumers.
Whilst industry turnover remains down on 2019 figures, the census still reported an overall 16% growth from 2021 to 2022 for the UK Vending, OCS & Coffee-to-Go market. This was aided by increased revenues from cold beverages (up 23%), hot beverages (up 17%) and snacks and food (both up 21%).
The AVA’s findings reflect the ever-changing nature of the working world, with hybrid working seeing a reduction in the use of traditional workplace canteens and increased demand for micro-markets and ‘smart fridges’.
In many cases, ongoing hybrid working since the pandemic has led to a continued shift away from the traditional ‘canteen’ in many office spaces, as it is no longer economically viable with less people in the office on a daily basis. As a result, there has been a continued increase in self-serve fresh food and premium coffee services, with 480 micro-markets now installed across the UK, which demonstrates a 17% increase from 2021. The census also revealed an increase in the use of ‘smart’ fridges, with a 125% increase in the number installed since 2021.
Meanwhile, cashless operations continue to increase, with more than 65% of pay-vend machines now having cashless systems, with over 85% of readers now open-site. Now, several operators have a significant proportion of their machines that only accept cashless payment, with a desire to eliminate cash altogether from their businesses within a few years. Where cashless systems are fitted, almost three quarters of sales (72%) are cashless, a rapid increase from 24% in 2017.
One of the biggest concerns that arose as part of the census was about rapidly rising inflation, in terms of product costs, fuel and energy costs, labour costs, and the risk of recession that was forecast in 2022. Operators reported a 19% increase in costs with vending price increases of around 16% to offset these increases. With costs continuing to increase, many operators may have to raise their prices further and there is concern around how this may impact consumption going forward.
Chief Executive of the AVA, David Llewellyn, said: “After a challenging few years for the industry, we have seen the industry building back and the world of vending, Coffee services and Automated Retail continues to change and evolve significantly.
“Technological developments and operational necessity – such as staff shortages – have meant that our members have had to become even more agile and responsive to changing economic and market conditions, introducing new ways of working, monitoring and managing their businesses.
“Proposed changes to and the introduction of new legislation – and its delay – still poses a challenge for the industry and its an area of concern amongst members. It is important that our members stay up to date with the latest regulatory changes and can plan accordingly to ensure compliance and maintain their competitiveness. The role of the AVA continues to be focused on supporting our members to understand and navigate these changes, as well as helping to ‘manage’ the impact for the wider industry.”
For further information on the AVA and its Census, visit: https://www.the-ava.com/.