Monday, February 16, 2009

Vending Machine Economics

Tokyo's streets are characterized by a plethora of vending machines--dispensing everything from soft drinks, candy, cigarettes, magazines, personal toiletries, and beer. Unlike other major cities such as New York and London, virtually every downtown street corner seems to have at least one vending machine. Explain why vending machines are so prevalent in Tokyo versus more traditional purveying mechanisms such as newsstands, grocery stores, and liquor stores.

Congratulations to Jenny Kuebel (our first two-time winner this semester) for being the first to provide a reasonable explanation for the prevalence of vending machines in Tokyo. I think Jenny hits the nail on the head when she notes that vending machines take up very little space compared to a standard brick and mortar store. The scarcity of land in downtown Tokyo suggests that rents would be very expensive for such brick and mortar stores.

1 comment:

Jenny Kuebel said...

Vending machines are much more cost efficient. Vendors do not have to pay employees to run each vending machine. (Unlike paying employees to run each newsstand, store, etc.). Also, vending machines take up less space than a stand or a cart would. Many people in Tokyo do not drive cars, therefore buying groceries in bulk at a store would be difficult to get home. Vending machines allow them to buy what they want when they need it in small quantities.