As the operating environment remains more challenging than ever for many vending operators, operators still recognize that in order to succeed, they must continue to invest in equipment.
For the fourth year, Automatic Merchandiser has queried readers on their purchase intentions and has found that operators remain reasonably committed to investing in new equipment.
This year’s survey indicated that operators are not as aggressive as in some of the prior years, but this does not necessarily mean they will purchase less equipment. Sometimes less aggressive purchase intentions reflect a more realistic view about future needs.
While locations are not adding a lot of employees, the location downsizing that began in 2000 and 2001 subsided in 2004, as reported in The Automatic Merchandiser State of the Vending Industry Report in August. As a result, many vending operators want to take advantage of more stable location populations by offering new, state-of-the-art equipment.
Veteran operators have learned from experience that newer and better equipment traditionally results in higher sales.
Automatic Merchandiser sent an e-mail survey to 3,800 operators in August, asking for specific purchase plans in every major equipment category. Close to 300 completed questionnaires were returned within one week.
The survey does not indicate to what extent operators will follow through on their purchase intentions. Operators typically set goals but wait until their sales justify following through on purchase intentions.
Most aggressive plans: snack machines
The most aggressive plans call for investment in snack machines. A sizeable majority of operators, 84 percent, plan to buy snack machines this year, and the majority of them plan to buy new as opposed to used machines.
The next most ambitious plans are for new beverage machines. A majority of operators plan to buy beverage machines, and more plan to buy new rather than used models.
Operators have traditionally spent more on snack machines than beverage machines since they can usually get loaned beverage machines from beverage bottlers.
Operators plan to invest more in new than used machines in every equipment category.
Combination machines was the one segment in which this finding is different than in previous years, when operators planned to buy more used than new machines. This could reflect a rising interest in combination machines in an attempt to penetrate smaller locations.
As noted in several previous reports, the small location market continues to challenge vending operators.
Purchase plans continue to be weakest in integrated food systems, machines that hold food in a frozen state and heat it. The number of operators owning this type of machine was very small to begin with. Such machines are used for limited applications, and they are often used mainly as selling tools.
Investment in support equipment
The survey queried operators on investment plans for equipment besides vending machines, such as food packaging machinery, storage equipment, microwave ovens, computers and delivery vehicles. The survey revealed that vending operators plan to invest in this supportive equipment at the same level as reported in previous years’ surveys.
One notable finding this year is that more operators plan to buy computer equipment than reported in the last survey, which was in 2005. This indicates that operators are becoming more aware of the need for state-of-the-art computer systems.
Not only did more operators indicate a willingness to invest in computers, but a larger majority indicated they will invest in new as opposed to used equipment, compared to those answering the question two years ago.
Operators rank equipment
The survey once again asked operators to rank equipment brands based on which machines they currently own and which they prefer for the different equipment categories.
Brand rankings were also asked for OCS equipment. It is important to note that while 45 percent of the operators queried are active in OCS, only 3 percent of the respondents are dedicated OCS operators.
Automatic Merchandiser believes there is a strong likelihood the OCS equipment rankings would be different among dedicated OCS operators.
Whether or not vending operators follow though on their purchase intentions this year will depend on how much the business climate changes. A more prosperous environment will result in more aggressive investment in new vending and OCS equipment.