The AVA has welcomed measures announced in the budget that are aimed at easing cost-of-living pressures but has warned that vending operators will continue to face significant cost pressures.
Yet another Chancellor has failed to grasp that the vending industry could use some government support.
The helpful bit? By extending the 5p fuel duty cut and VAT relief on electricity bills until July 2027, HMG offers some welcome breathing space for operators managing delivery fleets and energy-intensive vending premises: but with energy, transport, staffing, and equipment costs continuing to weigh on businesses, the extensions won’t remove the wider pressures facing the industry.
The 3.9% increases in the National Living Wage and National Minimum Wage will add significantly to payroll costs for operators who employ staff in warehousing, logistics, replenishment and technical support. For many small and medium-sized vending businesses, frozen tax thresholds mean employers are having to absorb ever-higher wage costs simply to ensure staff see a meaningful increase in take-home pay. Add this to recent increases in employer NI contributions and the bottom line is that vending businesses are being forced to pay substantially more just to stand still.
In fact these mounting employment costs are counter-productive; squeezing margins, limiting recruitment, delaying investment and making it harder for operators to grow, innovate, and remain competitive.
And that’s not all. In addition to rising operating costs, vending operators are facing a growing wave of regulatory pressures. Extended Producer Responsibility obligations, alongside wider environmental and packaging compliance requirements, have already increased costs and administrative burdens across the supply chain. The proposed ban on the sale of high-caffeine energy drinks to under-16s could also have a significant impact, with AVA estimating the measure could cost the industry £43 million in lost sales and operational impacts. Meanwhile, the rollout of Deposit Return Schemes across the UK risks adding further complexity and cost for operators.
The AVA also notes the Government’s plans to use additional revenue from online retail platforms and gambling taxes to fund business rates reductions for many high street shops. While this may help support the wider retail landscape, vending and automated retail must not be overlooked. Operators need clarity on whether, and how, they will benefit from business rates reform, particularly where machines, micro-markets and unattended retail locations operate outside traditional shop premises.
‘The Government can’t continue to treat vending and automated retail as an afterthought’, AVA Chief Executive, David Llewellyn, said. ‘Operators are facing a perfect storm of rising employment costs, increasing environmental and packaging regulation and further policy proposals that threaten sales and add complexity. While the Budget offers some limited relief, it does little to address the growing financial burden being placed on an industry that keeps workplaces, hospitals, transport hubs, and public spaces fed and hydrated 24 hours a day’.
Amen to that.
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