Everyone knows things are tough out there. Operating costs are rising. Accounts are downsizing. Consumers are worried about their jobs. But the old adage about “the tough get going when the going gets tough” isn’t where we need to be right now.
There is more than a typical recession going on. Established buying habits are changing, and when the economy recovers, whenever that might be, experts believe consumers aren’t going to behave the same way they did in the past. Many believe that some lasting changes are taking place.
Foodservice gets hit hard
Consumers have reduced visits to commercial foodservice outlets, creating what The Wall Street Journal claims is the longest period of foodservice job losses on record. In their place, consumers are buying more food at supermarkets and membership warehouse clubs. Heat-and-eat meals have been especially successful in these “economy” outlets.
While the commercial foodservice channel has suffered, convenience stores, a hybrid between retail and foodservice, have grabbed a bigger share of the food business. Lower fuel costs have driven some of this change as of late, but food sales were rising prior to the recent drop in fuel costs, according to the National Association of Convenience Stores. Which says that convenience — the vending industry’s key equity — remains important to consumers.
Amidst all of these changes, Automatic Merchandiser commissioned Leo J. Shapiro & Associates Inc. to study consumer behavior as it relates to vending.
The survey found that among the population at large, vending sales have fallen at a level comparable to fast feeders, coffee shops and tablecloth restaurants. The consumer has cut back on all outlets except for those that they see as offering the best values.
The ‘core’ vending consumer
The survey also found that a minority of consumers make the majority of vending purchases, and among this select group of consumers, vending sales have not declined as much as sales in other venues.
Many operators have known for quite some time there is a select group of regular vending users. What operators might not have known is this group has cut back less on their vending purchases than on purchases at fast feeders and coffee shops, as described in the story beginning on page 28.
Some of these consumers have actually increased their vending purchases, and those who have say they have done so for economic reasons, according to the study. In other words, the most active users recognize the economic value that vending provides compared to other foodservice outlets, as well as the convenience.
Operators have an opportunity to enlarge this group, as only a minority of the at-work consumers regularly use vending. That’s a long-term challenge.
Vending’s unique equity
In the near term, operators need to recognize the relationship they have with active vending users. They need to understand their needs better and market to them more aggressively. The survey identified some strategies to consider.
Technology has brought new ways that operators can improve the value they offer, some of which our story covers. Hence, we launch a series of articles, beginning this month, under the heading, “The case for vending.” It’s a case that the industry has to make.