The decline in confidence in the micro market segment has steadily declined throughout 2019, from 4.33 in Q1, 4.13 in Q2, to 3.94 in Q3. The outlook reported in Q3 may have fallen further partly due to the time of year that the upcoming quarter holds – December, January and February – as a couple operators who had said the outlook was solely “fair” for micro markets specifically indicated in their comments about their business outlook for the upcoming year.
Challenges with micro markets
Compared to last quarter’s survey, a greater portion of industry professionals said the percentage of revenue from micro markets they accumulated had remained flat or decreased over the course of the prior quarter. Sixty-seven percent of question respondents in the Q3 survey said the percentage of revenue had increased, compared to 82 percent who had said in the Q2 survey that it had increased. The percent of people who said revenue from micro markets decreased nearly doubled, from 5.9 percent to 11.1 percent.
Operators cited issues with space at account locations, a desire to focus on larger accounts while small accounts are looking for micro markets and “having a hard time getting on board.”
“Customers are still enjoying the micro markets but are constantly asking for more new items,” said a full-line vending operator in Pennsylvania who experienced a decrease in revenue over the last quarter yet has had steady sales overall and plans to open more markets. “We are trying to focus on rotating items on a weekly/monthly/seasonal basis to keep the markets fresh.”
Micro markets accommodate fresh food, bring in added revenue
On the other hand, several operators noted benefits of micro markets in their survey responses, including markets’ ability to accommodate customers who desire fresh food and to increase revenue for operators.
“Markets are a great source of revenue and the markup is substantially higher, which generates profit,” a full-line vending operator with headquarters in Montana said. “Additionally, markets don't have the restraints of a physical vending machine.”
“Micro markets go beyond the vending of prepackaged foods, although they certainly can provide them,” an operator of office coffee service, vending and micro markets headquartered in California added. “Today’s consumer, however, seeks fresh foods and beverages, which micro markets can stock in every variety.”
Launching into micro markets has worked wonders for one operator in just a short time.
“Just started less than one year ago with markets. That is mostly all we put out now,” this full-line vending operator from Pennsylvania said. The operator reported an “excellent” sales outlook for their micro market operation.