Just before the lockdown kicked in, life was good at Select Vending. One of the longest established vending companies in the South West, the Plymouth based businesses enjoyed a wide portfolio of clients, an experienced and loyal staff, a sound financial footing and earlier this year, the company was very proud to be awarded the Silver Investors In People standard.
It was a ‘feel good’ time, which was exemplified when the company had to remove a machine from Axminster College Sixth Form Centre, to facilitate a refurbishment of the premises.
Upon collecting the machine, Select Vending technicians were delighted to discover that the students who had come to rely on it had attached lamenting messages. One guy wrote: ‘All the Twirls I’ve had from you, all the Buenos too! You’ve brightened up my depressing ‘A’ levels and given me a reason to get up in the morning.’ Another wrote, tongue in cheek, ‘Bloody Tories! Ruining Brexit and now our Snakky Max!’
Sadly, there wasn’t time to complete the refurb before push came to shove and the whole country found itself locked down. The Snakky Max has now been reinstalled at another location.
‘I’ve been around vending for most of my life’, Peter Graddon told PV Editor, Ian Reynolds-Young. ‘I joined our family business at 16 as a Trainee Service Engineer and now, at 60, I’m Co-Director of Select Vending along with my wife, Janet. The changes the industry has seen during my time have been off the scale, especially in the past 4 years – it’s been crazy. It’s taken the coronavirus situation to bring everything to a grinding halt.’ The hiatus has given Peter and his peers in vending an opportunity to take a long look at their businesses.
‘I think we’re looking ahead to very different times.’
‘I think it’s made everybody stop and realise that we can’t simply carry on the way we have been’, Peter said. ‘We’ve invested a considerable amount of money in cashless over the past 18 months and we believe that’s the way to go. We’ll have to lose managed machines that aren’t reaching the sales required to cover costs and concentrate on those that are generating reasonable amounts. I think we’re looking ahead to very different times.
‘I’m sure we’ll all be operating fewer machines; I don’t think we’ll have a choice. Talking to industry colleagues, the consensus is that most of us have experienced a dramatic downturn in income, even when you take high turnover sites such as hospitals into account. They’re not the generating the income normally achieved as footfall is down because there are – understandably – far fewer visitors than normal. We’re thinking that when we come out of the pandemic – and who knows when that’ll be, the middle of next year? – We could have 25-30% less income than we did before the pandemic.’
Traditionally, vending company owners have been exceptionally protective of their businesses, always keeping their cards close to their chests. Now, though, the mentality is one of ‘we’re all in this together’.
‘We’re proud to be part of the Cover Group family who have supported each other and helped each other out’, Peter said. ‘Normally, you’d keep bad news to yourself, but in this crisis we’ve all been sharing, because we’re all experiencing the same challenges.
‘People are scared of handling cash.’
We’re concerned that when people finally return to work, the last thing they’ll be doing is buying drinks out of coin-operated coffee machines. People are scared of handling cash and although we’re told it’ll be OK, whether we like it or not there’s still an element of doubt in the public about using cash. I’m a contactless convert myself: wherever I can, I use my phone or card to pay for things. Fortunately, Select Vending now has a lot of machines out there that are cashless, so there’s some optimism for us on that front. Whichever way you look at it, though, the vending industry is going to look very different in the future. We are trialing payment apps and other development products within the contactless environment to encourage customer interaction in the future.
‘Select Vending is going to be OK’, Peter said. ‘The companies that will struggle most are those that are highly geared. We’ve been able to give payment holidays to our customers, on their rentals for instance, because we want them to be there when we come out the other side and we want them to continue dealing with us. We’re doing everything we can to try to protect our customer base. If a business is short of cash, though, that’s easier said than done.’
Business retention is not the only priority that has to be addressed. Perhaps the biggest issue of all concerns Human Resources…
‘We have 60% of our staff on furlough’, Peter said. ‘We’re in the South West and the mainstays of our business are hospitals, businesses that supply the NHS and distribution companies. Most factories are closed or ticking over. ‘Tourism and Hospitality’ is non existent. We have had to live with this and in the period from mid March to the end of April, our sales were down by £130k. We’ve shared this with our colleagues at Select, because sometimes, when you talk about things in percentage terms, people can’t really grasp what that means. By talking plainly in terms of cash, the staff on furlough can understand why we had to do what we’ve done.
‘We are reassuring our furloughed staff that they are still very much [part of the team by sending them an e-mail every week to keep them up to date’, Peter said. ‘What we’ve done is surround ourselves with colleagues who are multi-talented, people who can do a bit of operating, can work in the office; can count the cash, take phone calls and have an understanding of our management systems ; things that some team members can’t do. So, what you’ve got to be careful of is, if you’ve furloughed half your workforce and there are redundancies at the end of all of this, you can’t automatically make the people who haven’t been around during the crisis redundant. If you do, that can be seen as ‘victimisation’. Meanwhile, the people who haven’t been furloughed say, ‘well, you’ve been paying them 80% for doing nothing; we’ve been doing all the work’. So, while it’s great what the government has done, it’s not as straightforward to implement the furlough scheme in the vending industry as it is in, say, the car business, where you just close your showroom.
‘Having said that, without the rate rebate and without the furlough, if I’m honest it could have been a lot, lot worse for our company. I think that, in the back of our minds, all of us in the business know that vending is going to be a different place. It’s going to be tough, there’s no doubt about that.’
‘We’ve had to reinvent ourselves.’
Necessity has proved to be the ‘Mother of Invention’ at Select Vending as it has elsewhere. ‘We’ve had to reinvent ourselves’, Peter said. ‘We’ve created an online shop, while the office has been closed, for the Blue Pod Coffee Company part of our business. It’s enabled us to continue to ship products to our customers. We have ‘click-and-collect’ and contactless delivery in place for that, and it’s been working well for us. However, it makes you think, ‘why don’t we do that on the vending side of the business, too? Could we manage without tele-sales and give customers a log-in so they can order their usual products easily, and give them a discount for paying up front?’’
Then, there’s the issue of premises to consider. ‘We’ve have a large business unit that we bought 16 years ago as an investment and we’re beginning to doubt the value of it going forward. Because of the crisis, we’ve been able to prove to ourselves that, with technology, we can effectively work remotely utilizing the VoIP phone system we have. As far as our customers are concerned, it’s just like we’re in the office; it’s ‘business as usual’. Zoom meetings and Microsoft Teams have enabled face to face, real-time discussions while practicing social distancing. Most of us had never heard of Zoom earlier this year but now, it’s an integral part of the working day!
‘We’ve focused on social media during the crisis and we’re constantly promoting ourselves on all platforms, to let customers know we’re still here and open for business. The international emergency has been an irresistible catalyst for self-examination; for individuals, for businesses and for government. The universal conclusion seems to be, ‘just because we’ve always done things that way, it doesn’t necessarily mean ‘that way’ is ‘the right way’. Like it or not, COVID-19 is a revolution in disguise. Even when it has abated, its effects will remain with us, and what that means for the future, nobody really knows…
‘We’re still living the vending dream here at Select Vending although these days, the dream is slightly more challenging’, Peter said.