October Operator Confidence Falls Due To Economic Uncertainty

U.S. operator confidence fell in October 2013 1.1 percent from 130.6 in September 2013 to 129.17. This decline came in the wake of the government shutdown that caused many operations to lose business.

Businesses near government-operated facilities noted a large loss of income due to the shutdown.

“Most of our business is with hotels at entrances to national parks. The government shutdown killed our business. Normally we slow down in December and January and then pick up after that. We figure our losses will be half a year’s income over previous years,” said a Utah-based operator. As the economy continues to recover, however, operators noticed recovering business.

The majority of OCS operators reported a higher-than-average confidence. One Nebraska OCS operator said, “I have seen double digit growth in my business over the last few months.” Meanwhile, a Minnesota OCS operator noted, “We are growing at a very good pace this year and expect this trend to continue into 2014.”

Although OCS operator confidence seems to be up, confidence in vending continues to slide. Operators noted that they are concerned with healthcare cost increases, making business costs for employees uncertain. Several operators also reported government, economic and job safety uncertainties were causing consumers to withhold from making vending purchases.

Micro market outlook continued to steadily improve with several operators looking to open new markets in the coming months. “Micro markets are appealing to a larger population within the workplace, leading to significant increases in gross sales,” a New York-based operator said. “We do, however, have concerns about the future of our public school channel of business with regards to potential extreme federal regulations. We need product manufacturers to continue to expand their wellness offering as our industry transitions more into a sensible snack and meal option provider,” he continued.

With an average being 100, the index of 129.17 represents a positive outlook for the industry. Although operator confidence fell in October 2013, projected operator outlook for the upcoming year is generally positive.

Methodology

The OCI is based on a monthly survey sent to the VendingMarketWatch Board of Operators. It is sponsored by Mondelez International. The Operator Confidence Index is the first of its kind that tracks the level of confidence in the vending, micro market and office coffee service (OCS) industry and it is only available from VendingMarketWatch and Automatic Merchandiser.

If you are interested in joining the Board of Operators, please contact the publication assistant editor at Adrienne.Zimmer@VendingMarketWatch.com.

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