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Highest ever levels of consumer household expenditure on food are not enough to boost the automatic vending market

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2009 was a difficult year for most markets and the automatic vending industry was no exception. According to Automatic Vending, a new Market Report from market intelligence provider Key Note, continued annual decline of vending unit volumes was finally met with a market contraction of 4% in 2009. The return to marginal economic growth and increased expenditure on food and non-alcoholic beverages in 2010 was, however, estimated to have helped the refreshment and 'other vending' sectors return to growth.

Key Note estimates that the refreshment vending sector grew by 1.6% to a value of £1.5m in 2010 on 2009 levels. This growth was also mirrored in the 'other (optical media, sanitary products, stationary etc) vending' sector, which was valued at £275m in 2010, a 1.9% increase on the previous year. Despite these improvements, the overall market continued to contract in 2010, primarily because of the continued decline of the cigarette vending sector.

The cigarette vending machine sector has experienced modest year-on-year growth since 2006, even in 2009 when the rest of the market contracted. This was in spite of numerous tobacco price increases and the decline in the number of public houses where the majority of machines are located. However, the sector appears to have reached breaking point in 2010. Government health legislation drawn up in 2009 banned cigarette vending machines with effect from October 2011, effectively removing their presence form the market. In 2010, Key Note estimates that the accumulative effect of these factors has reduced the value of this sector by 33.6% to £100m. This dramatic fall is one of the main causes for the overall market contraction in 2010.The cigarette vending market is estimated to continue to decline even further in 2011 by 50% to around £50m and with cigarette machines' effective removal from the market, the other two sectors will be left to fill the void.

Despite growth being forecast for the future for the automatic vending market, there are a number of obstacles facing the industry. 2012, the first full year without cigarette sales will also see the delayed introduction of new 5p and 10p coins in the UK. The introduction of these coins is set to cost the industry significantly, as a large number of machines will need to be modified. These factors, coupled with the high levels of unemployment and inflation that have been forecast for the next 2 years, is predicted to cause a further contraction in the market in 2012, and it will not be until 2013 that conditions will start to improve for the automatic vending industry.

Press enquiries: Jack Sykes at Key Note at or 0845 504 0452. Press/review copies of the report are available on request.

Key Note's 2011 Market Report, Automatic Vending, analyses the market for video games hardware, software and accessories in the UK, including mobile phone games. Not included in this report are social media games, as they rely heavily on advertising instead of consumer expenditure.
Key Note Ltd has been providing commercially relevant market information to libraries, academia and businesses for almost 30 years. With over 1,000 titles available across 29 market sectors, and new or updated titles published every month, Key Note is one of the UK's most prolific and respected business information providers. Within the range, some reports are written in response to particular market conditions, whereas other reports will be produced regularly year on year.

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