When it comes to micro markets, operators only have good things to say. In our recent Vending Operator Confidence Index, operators reported that, “Micro markets continue to grow beyond expectations,” and that micro market are “…by far a superior product and the future of breakrooms.” They were ranked as one main reason vending revenues increased last quarter in the U.S.
Placement matters
Micro market placements are predicted to continue to grow in the coming year. Many respondents noted they are hoping to open one or two micro markets per month in 2017, with an emphasis on location placement. A Florida-based operator wrote, “Our projection for micro market placement in 2017 is based on quality of the markets vs. strictly number of placements.” The operator’s company had previously experimented with placing markets in locations with smaller populations and with standard business hours, but found that those markets were underperforming. The company even scaled down the size of the market to reduce the amount of money invested in the equipment and inventory but still found these locations to be adequately served by traditional vending. “We are still looking for opportunities where the population and working hours will support the investment in equipment and the higher number of SKUs available in a normal size market,” he wrote. “Having said that, we anticipate continued growth in our micro market business in 2017.”
A Virginia-based operator echoed those sentiments by stating, “I think micro markets are here for the long term, but I think we need to be very careful where we install these units.”
Bottom-line growth
Micro markets also added to a vending operation’s bottom-line last quarter and they are predicted to do so once again in 2017. One Wisconsin-based operator noted that 18 percent of his company’s total sales in 2016 came from micro markets and he expects it to be 22 to 25 percent by 2017 year-end, he reported.
Another Michigan-based operator wrote, “Micro markets now are 13 percent of our total sales. A year ago, it was just over 7 percent.” He expects it to be at least 20 percent at the end of 2017.
As for market saturation, operators aren’t concerned. The Michigan-based operator wrote, “I do not expect micro markets to be saturated in 2017. I fully expect that we will continue to manage that segment of our business and the potential growth.” Meanwhile, an operator based out of Illinois said, “Even though we have been promoting the concept over the last 3 years to every possible prospect we felt was a good candidate in our area, there are still a lot of companies that have not adopted the concept,” he wrote. “So I do not believe the market will be saturated in 2017. Perhaps over the next three to five years, this may be the case.”
As 2016 comes to an end, operators are generally enthusiastic about how much their micro market business has grown. Those invested in the segment will focus their attention on gaining more knowledge and understanding of micro market opportunities, such as strategic layouts, new product introductions, marketing and promotional activities.
