INDUSTRY INSIGHT


Pandemic takes its toll, but industry set to weather Brexit


Vending International spoke to Automatic Vending Association (AVA) chief executive David Llewellyn about the sector’s struggle to deal with the economic effects of the pandemic, and what, if any impact Brexit might heap upon it.


A


n AVA survey in June revealed that at the peak of the first lockdown vending businesses were 60 per cent down on


where they had been in comparison with the previous year. This improved marginally as the first


lockdown eased to a position where businesses were down 40 per cent by late September, early October.


At the time, the AVA was surveying its 200 members, both operators and


suppliers, on the issue of business impact, and whether or not they would be considering redundancies or furloughing staff. The results of the survey revealed that of the 24,500 directly employed vending


workers, operator members were expecting to lose about a quarter of their staff. And why? Partly because the government’s ‘work from home if you can’


instruction has dealt a metaphorical hammer blow to an industry that historically started out providing coffee into offices. It’s worth noting that as much as 80 per cent of AVA members’ business is


in the workplace, colleges and universities. “What you have to bear in mind is that a lot of these businesses are small


to medium enterprises, many of them owned by families who have built up businesses over many years and have been with the AVA since the beginning. Now they are having to look at how they can resize their business so that it is sustainable for the future,” Mr Llewellyn reveals. “So far, we haven’t heard of any closures, but they are having to resize.


However, you dress that up, it means people losing their jobs. It’s been very hard and very emotional talking to people who are having to lay off staff, who have been with them from the start. Even those vending businesses supplying hospitals and healthcare


settings have ironically suffered serious setbacks. The ‘no visitors rule’ in hospitals and care homes has eliminated an important vending customer


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stream when you consider that in ‘normal times’ every patient welcomes on average two visitors a day. The Coronavirus Job Retention Scheme has been “one of the godsends”,


Mr Llewellyn acknowledges “and we have taken as much advantage as we can”, but there are still some new businesses or those taking dividends instead of salary who fall into a ‘forgotten group’ who are excluded from government schemes. In addition, some grants, for businesses which are not forced to close but


are nonetheless severely impacted by the restrictions, are discretionary, and some vending businesses are at the mercy of local authorities in the application process. The AVA has been assisting with these claims.


Brexit


As the Brexit transition period finally came to an end at the end of December and the UK entered into a new relationship with the European Union, what sort of impact would the already embattled vending industry have to prepare for? According to Mr Llewellyn, the answer thankfully is – very little! The


majority of operators are UK businesses who conduct all their business within the country, with no trade outside UK borders. He stressed though, that when it comes to supplies, operators will have


to be reliant on suppliers, but the majority of these are large multinationals already working across Europe who are experts at managing their supply chains. “We think operators will be okay. Brexit is an additional wrinkle, but the


impact of the pandemic is the main issue. If it weren’t for the pandemic, on a day-to-day basis, things would sort of continue as normal.” Mr Llewellyn concludes with a reminder that the industry is worth £1.6


billion in the UK which rises to £2.2 billion when adding in coffee on the go – a growing part of members’ business. “Let’s not forget that for the government, that means £500 million in tax.”


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