NEWS | Industry Updates


Vending & automated retail industry reports sustained growth following pandemic


In many cases, ongoing hybrid working


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’.


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/.


ONS inflation data released last month shows that UK food and


drink prices in April 2023 were up +19.0% year-on-year. This broadly aligns to IGD’s forecast and may indicate that food


price inflation has peaked – the rate in March was +19.1%, so the new data indicates a small decline. James Walton, chief economist at IGD, explains: “IGD’s latest


IGD forecasts food inflation is about to peak


The Institute of Grocery Distribution (IGD) has forecast that food price inflation may have peaked.


4 | vendinginternational-online.com


forecasts, along with new figures, suggest that inflation may have peaked. This is partly because the powerful forces which drove those price increases are running out of momentum, with prices for energy, fertiliser and some basic food commodities falling. “Despite this, due to a number of factors such as long and complex supply chains and ongoing contractual arrangements, there are still further cost increases to work through the system. This means we will continue to live with inflation for several months – which doesn’t offer much relief for hard-pressed shoppers. “However, food retail is highly competitive and businesses have


a strong incentive to pass on the benefit of lower costs to shoppers promptly. “There are many variables in play, with weather and crop yields


always hard to predict, but – barring major new shocks – IGD believes that food price inflation will gradually begin to slow as 2023 progresses.”


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