Operators survive and adapt

July 8, 2021
Automatic Merchandiser's 2021 State of the Industry report prompts the question: will the pandemic be a blip on the vending trade's radar, or will it have long-term effects?

There’s no question that 2020 was a historic year for the United States and world, and an extraordinary (and very painful) year for many of the nation’s vending, micro market, office coffee service and contract foodservice businesses. The economic crisis brought on by the COVID-19 health crisis was unprecedented in its scale.

Last year in this column, my predecessor, Abby White, had the unusual assignment of reporting on a record year for convenience services – sales rose 3% to $24.2 billion in 2019 – just a few months after the coronavirus had ambushed the U.S. economy in March 2020, subsequently shutting down most of the industry’s equipment and locations. This year, Automatic Merchandiser’s State of the Industry report is showing a total sales decline of 45%, a loss of nearly $11 billion. What a difference a pandemic year makes.

The vending and micro market industry has never experienced the abrupt changes that occurred in 2020. Will the pandemic be a blip on the industry’s radar? Or will it have long-term lasting effects on the way vending and micro market operators do business? Probably both.

We believe that operators whose businesses survived the 2020 pandemic year have a very good chance to prosper as the economic conditions improve. And they have the technology to succeed; the industry’s adoption of new methods and new tools almost always had been accelerated by an economic downturn (why change when times are good?). If that’s true, then imagine what far-reaching advancements a pandemic can procreate for an industry that survives it.

The recovery is underway and is predicted to hasten in September 2021. The Group of 20 economies all saw their gross domestic product return to pre-pandemic levels in the first quarter of 2021. China, where the coronavirus pandemic emerged, recorded the highest annual growth (18.3%). In the U.S., real GDP, the sum of all goods and services produced in the economy, jumped 6.4% in the first quarter. Widespread vaccinations and more government spending helped get the U.S. closer to where it was before the pandemic struck.

However, just how and when the recovery and booming economy will affect the operator’s future remains to be seen. In the comments portion of our survey, the main concern voiced by operators was [paraphrased]: “will the shift to remote work become long lasting and dampen our business at corporate office accounts?”

To be sure, the performance of vending, micro markets, coffee service and contract foodservice has always been tied to employment, but that relationship may no longer apply to these channels.

Automatic Merchandiser’s State of the Industry report, which starts on Page 18 of the June/July issue of Automatic Merchandiser, is made possible by operators who take the time to complete the survey. We are grateful to those who undertook the task and salute all operators who survived 2020.


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