Vending machines prosper in economic slump

Jan 23 2010 by Chris Knox, The Journal

A VENDING machine company that was recently saved from moving out of the North East says it continues to benefit from the economic downturn as businesses restructure their catering facilities ... and has seen its sales grow from £3.5m to £5m as a result.

Gateshead-based Automatic Retailing Vending distributes vending machines around the country and has witnessed a sales boost over the last two years as employers close down their staff canteens and replace them with vending machines as part of emergency cost-cutting measures .

The firm has also been able to add 14 jobs to its workforce as a result, and expects to create further jobs this year as its clients continue to downsize.

The company, which employs 62 staff at its base in Team Valley, is now looking to achieve an additional 10% sales boost this year, as well as rake in profits of between 5% and 10%.

The firm was created by a company merger in 2008, which saw Jarrow- based Bede Group Services buy a 50% stake in the vending machine division of Cramlington-based Automatic Retailing (Northern) in a £1.5m deal.

Bede director Stephen Drysdale, whose business had managed to reach a turnover of £600,000 since setting up in 2007, became interested in the division after it was targeted by a national vending company which planned to move it down south.

This led to the threat of redundancies.

Mr Drysdale and fellow director Amanda McDonagh were previously managers of the northern arm of London-based vending machine firm Coffee Point in Newcastle which was taken over by Bunzl, prompting the pair to set up their own company.

The merger saw Bede and Automatic Retailing bring together their impressive list of clients, which have recently seen the addition of Procter and Gamble, Newcastle-based utilities support firm Accuread and the Royal Victoria infirmary, also in Newcastle.

Mr Drysdale believes he can now hit a turnover of £8m by 2012 in light of the firm’s rapid growth.

He said: “It’s fair to say that the recession has impacted on our sales. However, unlike most businesses, this has been in a positive way.

“There have been a number of occasions where we have delivered our machines just as staff canteens are being pulled out, which is a trend that looks set to continue.

“We are also working to get out machines in more hospitals and doctor’s surgeries this year.”

There are occasions where we delivered our machines just as staff canteens are being pulled out