The recession has forced operators to shift to a “survival” mode as worksite downsizing and a decline in consumer spending is hurting sales. In the interest of helping operators develop a business strategy, Automatic Merchandiser commissioned a consumer research firm, Chicago-based Leo J. Shapiro & Associates, to find out specifically how consumers view vending in light of the current economy. Vending operators might take some solace in learning that other retail foodservice channels are suffering the same fate.
The survey found that most vending purchasers establish a relationship with the vending machine that they patronize, indicating vending operators have an opportunity to build on their existing equity to improve sales. “If that could be tapped in a small way, you could improve frequency of use,” observed George Rosenbaum, who designed the Shapiro survey.
Operators will find that by building on an established equity — convenience — they can weather the current recession and improve profitability over the longer term, when the recession ends.
Many retail observers claim that consumer buying habits are changing, and the “trading down” that has occured will continue when the recession subsides.
In addition, while vending has gained some level of acceptance due to its perceived value in comparison to other retail channels, price resistance remains a major challenge.
RECESSION CHANGES CONSUMER BEHAVIOR
The Shapiro study is based on telephone interviews with 562 adults in 38 states.
Overall, the study found consumer satisfaction with vending reasonably good, even in the recession, but consumers remain resistant to paying higher prices.
The 22 percent of consumers who purchased from vending machines in a recent 24-hour period account for 60 percent of vending sales. The percent rises to 78 percent for everyone buying within the past seven days.
For most purchasers, the vending experience was equal to or superior to a store purchase. Only a minority felt compromised by using a vending machine rather than a store. One third (33 percent) said the vending purchase was more enjoyable than if it had been made in the store, and nearly half (49 percent) said it was the same as a store. Just 18 percent found it less enjoyable.
Relative satisfaction was slightly lower for freshness: 19 percent said that the vending product was fresher than the same purchase would have been from a store; 22 percent said it was less fresh. The balance (59 percent) said vending and store freshness were the same.
More than a third (36 percent) felt that the price for the vending purchase was unfair. This inequity was especially true for non-beverage purchases (55 percent).
Customers are making fewer vending purchases. Among active purchasers – those purchasing within the past seven days and accounting for 78 percent of vending dollars – 49 percent said they are buying fewer cold beverages than a year ago; 59 percent said fewer hot drinks; 42 percent said fewer snacks; 49 percent said fewer candy; and 48 percent said fewer sandwiches.
The number of customers who say they are buying more this year is relatively small; highest for snacks (37 percent); cold drinks (28 percent); and candy (26 percent); lowest for hot drinks (10 percent) and sandwiches (10 percent). On balance, those cutting back outnumber those buying more by a margin of about two to one or higher.
VENDING VERSUS OTHER RETAIL CHANNELS
The pressure on vending purchases reflects sales pressure generally for foodservice. Active vending purchasers (those who have purchased in the past seven days) have cut back more visits to fast feeders (61 percent), to coffee shops, also 61 percent, and tablecloth restaurants (51 percent) than to vending machines. Active vending purchasers cut back less on vending purchases, 50.5 percent, than in the other retail outlets.
Consumers overall are cutting back on vending just as much as the other outlets, but active vending users are cutting back more in competing retail outlets than in vending.