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Automatic Vending Market Report 2011
Key Note Publications Ltd, April 2011, Pages: 122
The UK market for sales via automatic vending machines was estimated by Key Note to have fallen in value by 1.1% in 2010 to £1.92bn, while the number of refreshment vending machines in the UK stood at around 449,000 in 2010, a 2.9% decrease on 2009 figures. Data from National Statistics suggests that family expenditure on food rose by 5.3% to £88.2bn in 2010. Sales from refreshment vending machines accounted for an estimated 1.7% of this figure, while the number of cigarette vending machines declined by 13% to 60,000 in 2010, due to the smoking ban and continued negative press surrounding cigarettes.
The automatic vending market consists of three main sectors — refreshment machines, cigarette/tobacco machines and other vending machines. Refreshment vending machines offer a wide variety of products, including hot and cold beverages, confectionery, sandwiches, savoury snacks and hot and cold meals. Refreshment vending is by far the largest sector of the automatic vending market. The cigarette vending sector has declined drastically over the past few years. This is principally due to the falling number of smokers, and the ban on smoking in enclosed spaces and public houses. The other vending machine sector offers the most diverse range of products, including condoms, optical media, stationery and computer accessories.
The modest growth and continued economic uncertainty observed in the UK in 2010 resulted in somewhat of a transitional period for the automatic vending industry. The volume of machines was predicted to have fallen across all three sectors in 2010, although increased family spending on food was thought helped the refreshment sector achieve modest growth. The other vending sector was also estimated to have observed a small level of growth. However, the decline of the cigarette vending market was the primary cause of the overall market contraction in 2010. This is partly due to the aforementioned ongoing issues affecting the sector, as well as the imminent enforcement of the Government’s Health Act 2009 in October 2011. The new Bill will ensure the total ban of cigarette vending machines in the UK. Companies that supply cigarette vending machines have already lost an appeal against this decision and the removal of this multi-million pound sector is predicted to lead to a large number of redundancies. On top of this, the introduction of new 5 pence (p) and 10p coins over the next few years will also cost the industry, as machine modifications will be required.
The UK economy is forecast to continue to grow modestly in 2011, benefitting the refreshment and other vending sectors. However, continued economic uncertainty and rising inflation may present difficult conditions for growth. Although the refreshment and other vending machine sectors may continue to grow modestly in 2011, this growth may not be sufficient to fill the void left by the effective removal of the cigarette machine sector in the near future.
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