Unlocking growth in automated retail

Despite a challenging economic backdrop, automated retail is a sector undergoing rapid transformation driven by technology, changing consumer behaviour, and new market entrants.

The Smart Retail Solutions (SRS) vending conference brought together industry data, real-world case studies, and cross-sector perspectives to explore how automated retail is evolving.

Market context: resilience amid pressure

The UK foodservice and vending market continues to operate in a constrained environment. Growth is modest, while cost inflation, labour shortages and consumer caution persist.

Consumers are increasingly selective with discretionary spend, particularly in away from home (AFH) channels. At the same time, cumulative inflation has significantly raised food prices and reduced purchasing power, reinforcing the need for strong value propositions.

However, demand is not disappearing - it is shifting. Consumers still prioritise convenience, quality and experience, creating pockets of growth across the sector.

For vending specifically, the UK market has recovered beyond pre-Covid levels, driven largely by price increases and evolving formats, even as machine numbers fluctuate and workplace habits shift.

The evolution of vending: from convenience to strategic channel

A consistent theme across speakers was that vending is no longer a secondary channel - it is becoming a core part of foodservice delivery.

Across sectors including convenience retail, QSR, contract catering, healthcare and universities, vending is evolving from simple snack provision into:

• Premium, fresh and hot food offers

• Technology-enabled, frictionless experiences

• 24/7 access solutions for complex environments

Consumers now expect vending to deliver choice, quality and personalisation, not just convenience.

Micro-markets, smart fridges and frictionless retail formats are gaining traction, supported by strong growth in connected, data-driven machines.

Key growth drivers shaping the sector

1. Technology unlocking competitiveness

Advances in payment, connectivity and automation are enabling vending to compete directly with retail and QSR:

• Contactless and mobile payments drive higher spend per transaction

• Data-led operations improve efficiency and reduce waste

• Frictionless environments (e.g. “just walk out”) are scaling across sectors

Crucially, technology is not just operational - it is transforming the customer experience.

2. Big brands entering the space

Major brands such as Greggs and Marks & Spencer are investing in unattended formats, validating the channel and building trust with consumers.

This creates a “halo effect,” encouraging trial and raising expectations across the market.

3. New locations unlocking demand

Growth is being driven by expansion beyond traditional workplace vending into:

• Travel hubs and airports

• Hospitals and healthcare estates

• Universities and leisure venues

• Forecourts and EV charging locations

These environments require always-on, labour-light foodservice solutions, placing vending at the centre of delivery.

4. Drinks as a major growth opportunity

Drinks innovation is emerging as a high-growth space, particularly:

• Iced and customisable beverages

• Energy and refreshment-led formats

• Affordable “treat” occasions

Drinks offer a high-frequency, high-margin opportunity with fewer consumption barriers than food.

Changing consumer behaviour: value, health and experience

Value remains critical

Around 60%+ of consumers actively seek deals when eating out, with meal deals driving both purchase and venue choice.

Consumers want:

• Clear, predictable pricing

• Bundled value (e.g. meal deals)

• Flexibility and choice within offers

Health and GLP-1 impact

The rising health agenda - including policy interventions and GLP-1 (weight loss drug) usage - is reshaping demand:

• Up to £1bn potential AFH impact from GLP-1 by 2031

• Reduced portion sizes and frequency of consumption

• Growing demand for protein, fibre and nutrient-dense options

However, this also creates opportunities in:

• Smaller formats

• Health-led innovation

• Functional products

Convenience is a given

Consumers increasingly expect:

• 24/7 availability

• Speed and frictionless journeys

• Access in more locations

Convenience is no longer a differentiator it is the baseline expectation.

Operational and structural challenges

While the opportunity is significant, several challenges remain:

• Cost pressures (labour, supply chain, energy) continue to impact margins

• Workplace patterns remain volatile, affecting core demand

• Cash vs digital transition is ongoing, with some consumer resistance at low price points

• Legislation and health policy are increasing complexity and compliance requirements

• Trust barriers persist due to legacy perceptions of vending

At the same time, waste management and fresh food logistics remain critical constraints in scaling higher-quality offers.

What this means for vending operators

1. Prioritise experience, not just availability

• Invest in modern, clean, well-presented machines

• Simplify the user journey (intuitive, fast, frictionless)

2. Lean into value mechanics

• Introduce meal deals and bundling

• Use dynamic pricing and promotions to drive basket spend

3. Expand into new locations

• Target healthcare, travel, leisure and forecourts

• Focus on underserved “unattended” environments

4. Upgrade the food and drink mix

• Increase fresh, hot and premium options

• Build out drinks innovation (iced, customisable, energy)

5. Use data to drive performance

• Optimise range, pricing and replenishment

• Reduce waste through smarter forecasting

6. Build trust to unlock higher spend

• Invest in machine quality, branding and reliability

• Communicate clearly (pricing, support, product information)

What this means for suppliers and brand partners

1. Support value creation

• Collaborate on meal deal mechanics and bundle pricing

• Enable flexibility across price tiers and formats

2. Innovate for new missions

• Develop products suited to vending (longer shelf life, portability)

• Focus on “allowed indulgence” and health-led options

3. Back operators with data and insight

• Share performance data and shopper trends

• Support range optimisation and NPD decisions

4. Invest in drinks and functional categories

• Prioritise high-frequency, high-margin segments

• Tailor offers to younger and convenience-led consumers

5. Embrace collaboration across the ecosystem

• Work with operators, caterers and technology providers

• Align on integrated, end-to-end solutions for sites

In summary

The conference made it clear: automated retail is moving from convenience solution to strategic growth engine.

Operators and suppliers that:

• embrace technology,

• adapt to shifting consumer behaviours,

• and collaborate across the value chain

will be best placed to capture growth in a challenging but opportunity-rich market.