Micro markets are in growth mode, according to the most recent Operator Confidence Index. The segment has received a very positive 3 month outlook, 4.43 out of a possible 5. Operators on the OCI board are crediting the improving economy and the dropping unemployment rate which is driving businesses to look for ways to retain good employees.
"Micro markets are a huge benefit for the employees that do not cost the company anything," said a micro market only operator in Illinois. This wasn't necessarily the case five years ago, when micro markets were relatively unknown to human resource managers and facility managers. Now micro markets are being used as a way to offer employees onsite meals, a better looking breakroom, and even location-sponsored incentives that aid in retention and lower turnover.
Greater micro potential
When asked how much micro markets are contributing to the operation's annual revenue, the average OCI board members reported 39 percent. Interestingly, the smaller the operator, the higher the percentage of revenue associated with micro markets. Operators making less than a million dollars annually, report a higher percentage of revenue from micro markets, 79 percent, where as larger operators, making over $10 million in sales, attributed only 16 percent to micro markets.
The future is bright for micro markets minus one notable exception – theft. "Sales continue to be great. Issues remain with shrinkage," said a full-line operator from Wisconsin. Theft of products in the micro markets, also called shrinkage on financial documents, was mentioned by a few of the OCI board members as a concern. One Virginia operator notes that it's getting worse, "I am finding more shortages than ever with the markets." Monitoring micro markets and reducing shrinkage is going to be a critical issue in the next quarter of 2018, but right now operators are reporting that the sales opportunity of micro markets outweighs the risks.
About the OCI
The Operator Confidence Index is a quarterly measurement of the micro market segment's outlook, managed by VendingMarketWatch.com and reported in the Micro Market Quarterly eNewsletter. The OCI number is based on a short survey send to the 80 OCI board members, made up of both operators and manufacturer/suppliers. To sign up to receive the newsletter, visit the subscribe page. If you are interested in being on the OCI board, please email the Editor.
