The recovery of vending machines located in captive environments such as offices, schools and hospitals remained relatively slow, driven by the emergence of new waves of infections which resulted in restrictions being placed on hospital visits, as well as delays in schools and offices opening during the first and third quarters of 2021. The scenario was exacerbated by the persistent fear of exposure to the virus, with many consumers limiting contact with machines and cash usage.
The competitive landscape remains consolidated amongst leading players as small and independent operators exited the channel due to limited access to the finance required to enable them to navigate the pandemic. In line with this shift, the channel reported up to 40% of vending machines belonging to “mom & pop” owners were significantly affected by the pandemic following a double-digit decline in 2020.
The extended ban on the sale of tobacco products in the early stages of the pandemic led to many vending operators reviewing their offer, with an increasing number of vending machines adopting alternative products such as snacks, beverages, and over-the-counter medicines. The shift was supported by the prevailing health and wellness trend that provided higher growth opportunities for companies such as Pharmashop24, which leveraged a strategic partnership with Shell to expand the supply of medical vending machines to over 110 outlets, with offers including products to address cold and flu, pain and fever, as well as oral and nasal care.
The performance of vending machines will remain subject to local consumers’ ability to resume their activities, with a lower level of restrictions set to facilitate a return to key operating areas such as schools and offices. The trend will also benefit from a further easing of restrictions, and improvements in the country’s vaccination rates, with the government lifting a curfew on 31 December 2021, which enabled consumer to once again access vending machines 24/7.
Contactless vending machines are also expected to continue gaining momentum, supported by a shift towards a more digitalised cashless economy, as well as increasing demand for convenience. In parallel, vending is also expected to embrace omnichannel approaches, with new machines likely to offer a synchronised shopping experience by coordinating vending purchases with a related mobile app.
The potential ban on tobacco vending over the forecast period will force players to develop more diversified offers, with medical and personal care products set to drive the expansion of inventories. Low penetration of such products is also likely to attract new entrants and therefore intensify competition across these categories.
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Vending
Vending means automatic retailing. It covers the sale of products and services at an unattended point of sale through a machine operated by introducing coins, bank notes, payment cards, tokens or other means of cashless payment. Sales figures cover vended products only, ie food, drink and other consumable goods such as vended tobacco, sanitary products and condoms. Services such as the public telephone, laundrette facilities, travel tickets, stamps, passport photographs, domestic energy supplies and business card creation are excluded. Coverage includes vending systems installed in public and semi-captive environments only. Hotels, transport networks, recreational centres, shopping centres/malls are included. Factories, offices, hospitals, prisons, schools and other captive environments are excluded.
See All of Our DefinitionsThis report originates from Passport, our Vending research and analysis database.
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