While the word of the year in 2023 and 2024 was “inflation,” the word of the year in 2025 is “uncertainty,” said Charlie McIlvaine, the chairman and CEO of Coen Markets and a NACS executive committee member, kicking off the 2025 NACS State of the Industry Summit.

The event took place in early April as the stock markets were roiled by the introduction of—and modifications to—tariffs.

“Unfortunately, a lot of my speaker notes are a week old,” joked Mark Daniels, Yesway’s chief strategy officer. “Everything I say now could be wrong in a couple of hours,” OPIS Chief Oil Analyst Denton Cinquegrana quipped.

The bar is really low to execute the most important transaction there is: The relationship between the sales associate and the customer.”
— Henry Armour, President and CEO, NACS

One Thing Is Certain: Uncertainty

“It’s a great time to have a crystal ball,” said Brad Clarkin, VP of production operations at Kwik Trip.

“Over the next 12 months, anything can happen—both good and bad,” noted McIlvaine.

On the regulatory front, some things seem probable. The “Make America Healthy Again” initiative will likely lead to some ingredient restrictions and dye and flavor bans. The question is which items are banned—and how long a lead time will be in place so the supply chain can manage change.

The supply chain could face an even larger disruption in the form of tariffs.

“The supply chain is dialed in for what it knows—and consumers are largely predictable in their behavior,” said Clarkin. But sudden changes can lead to immediate shortages that takes months to resolve. Just look back five years ago during the start of the pandemic when everyone wanted to buy a four-pack of toilet paper at the same time. Supply-chain shortages across the board lead to spikes in the cost of goods and helped push up inflation several years later, he noted.

Economic uncertainty may also cause some companies to hold onto capital to be fiscally conservative, and some capital investments may get delayed.

Another possible outcome: Uncertainty may spur continued mergers and acquisition (M&A) activity. “Money is looking for a flight to certainty in periods of uncertainly. And that could accelerate M&A activity,” said Yesway’s Daniels, especially in the convenience channel, which continues to be attractive to companies looking to grow or expand their portfolios.

Speakers agreed that tariffs are here to stay in some form or another, especially because once they are enacted they are hard to unwind.

“I think resilience is part of a strategy going forward. … How do you absorb external shocks and take advantage of opportunities?” said NACS President and CEO Henry Armour.

At the end of the day, uncertainty may not be bad for convenience retailers. The industry saw that during the pandemic. People need fuel, hot coffee and affordable food, and that’s what convenience stores sell, noted Yesway’s Daniels.

“During times of uncertainty, we do well,” said Daniels.

Diversify Your Revenue Base

Over the past decade, both real and anticipated decreases in demand for key categories has forced convenience retailers to examine their offers. Tobacco sales continue to decline, but some OTP products have seen strong sales.

Foodservice sales in convenience stores now account for 28.7% of in-store sales and 39.6% of in-store profit dollars, a huge increase from two decades ago when foodservice accounted for only 11.9% of in-store sales.

Meanwhile, predictions for the demise of the gas station—usually by someone who had a competing product or interest—are premature. Fuel demand in 2024 was up by 0.8%, and it remains to be seen how much electric vehicle sales will grow—if at all—as they have become politicized by both parties.

Fuel demand will likely decline over the coming years, but it will primarily be because of increased fuel efficiency with newer cars, not a switchover to EVs, which have accounted for only about 2% of new car sales over the past 12 years, according to Transportation Energy Institute research.

Meanwhile, another c-store staple—lottery—is facing challenges from legal sports betting. C-store lottery commissions declined 7.3% in 2024. It’s increasingly tough to compete against the thrill of betting on your phone—anytime and anywhere.

None of this change, both current and anticipated, means that c-stores need to reinvent themselves. “Instead of walking away from our traditional Cokes and smokes model, let’s refine it,” said McIlvaine.

That means looking for new opportunities to attract customers to solve their problems. The industry’s evolution overseas can offer inspiration: See “Big Ideas From Convenience Summit Asia” in the May 2025 issue of NACS Magazine for some examples, including how Japanese c-stores have evolved their ATMs to be more than just places to get quick cash.

Services like car washes can deliver strong revenue dollars. Despite increased competition from specialty chains like Mister Car Wash and apps like Spiffy and Washos that provide at-home car washing, c-store car wash programs developed solid sales. Retailers could take a page from the unlimited wash subscriptions from standalone operators that draw repeat customers to their location, said Varish Goyal, CEO of Loop Neighborhood Markets.

There is also the opportunity to expand general merchandise sales. Younger consumers are far more likely to seek out c-stores for phone chargers and groceries. (See “Need. Something. Easy. Close.” in the April 2025 issue of NACS Magazine.)

But most of all, diversifying revenue means offering more prepared food.

Foodservice Shows No Sign of Slowing Down

Foodservice sales in convenience stores now account for 28.7% of in-store sales and 39.6% of in-store profit dollars, a huge increase from two decades ago when foodservice accounted for only 11.9% of in-store sales.

Prepared food is the largest component (68.4%) of the broader foodservice category that includes commissary (8.8%) and hot, cold and frozen beverages (a combine 22.8). It’s also seeing strong sales growth, with a strong 43% increase over the past four years.

But that doesn’t mean that foodservice, specially prepared food, is easy.

“There’s a whole lot of opportunity in foodservice and a whole lot of challenge,” said Andrew Baill, Wawa’s senior manager of customer insights and strategy.

For one, the cost of shrink needs to be carefully managed. Food spoilage has increased 42% over the past three years. “This is one of the reasons that people stay out of foodservice,” said Loop’s Goyal.

Also, QSRs are pulling pages from the c-store playbook. Some, like Krispy Kreme, are offering more limited time offers to bring excitement to their locations.

And fast feeders are increasingly acting more like c-stores. “QSRs are unquestionably trying to be more convenient,” said Baill.

While c-store foodservice numbers have grown, not all consumers are sold on it. Consumers perception of c-store food is a challenge. Only 18% of consumers say c-stores are as capable of offering fresh, quality foodservice as QSRs.

Worse, even hungry customers already inside c-stores don’t necessarily purchase foodservice there; 28.7% of customers go to a QSR within 30 minutes of shopping in a c-store.

Despite the challenges, foodservice done well can deliver strong sales and profits. The average c-store in the NACS CSX Benchmarking Database has foodservice sales that exceed the average Subway and top foodservice decile performers have foodservice sales that surpass those of a typical Taco Bell.

“Whatever you do, do it really well and consumers will notice and keep shopping with you,” said Wawa’s Baill.

See Things Through Your Customers’ Eyes to Win

Inflation may not be the theme of 2025, but it’s certainly still on consumers’ minds. Nearly three in five consumers (58.2%) are concerned about food prices, said Chris Costagli, vice president and food insights lead at NIQ.

While inflation has cooled in 2025, the cumulative effect from the past few years has taken its toll. Candy prices are up 32.7% over the past three years and salty snacks have increased 28.9% over the same time frame.

In addition, if the initial round of tariffs proposed by President Trump were to be enacted, experts say it would raise inflation and shrink GDP, shrinking disposable income by $3,800 per household, according to Dr. Thomas Weinandy, senior research economist at Upside.

And while gas prices are a bright spot for consumers, down 6.5% last year, they could spike significantly in New England and the Midwest if tariffs are enacted on Canadian petroleum products, said OPIS’ Cinquegrana.

Retailers that acknowledge consumers’ current and potentially future financial pain are best positioned to capture consumers’ shrinking spending dollars.

Retailers also can communicate a value message to consumers who may not be facing severe economic stress. For example, Walmart and Dollar General have both had success in appealing to a higher-income customer base.

“It’s about the social cues. It’s all about what your customers value,” said Costagli. “You have to know what your guest wants.”

More than half (53.3%) of beer customers looked for promotions, said Wawa’s Baill. Meanwhile, OTP customers are more likely to be in a loyalty program.

In-store excitement also can draw in customers, especially around salty snacks and candy, the two categories that have experienced the steepest price increases.

“This [center store] is the best area of the store to try something new and build that basket,” said Baill. “This section is all about impulse,” with more than one third of all salty snacks (34.6%) bought on impulse, he said.

Most of all, find out what your customers want by listening to them.

“Everyone good in innovation has a real good understanding of the customer,” said John Benson, senior director at Alvarez & Marsal.

Finally, think of your stores as a refuge in an often-chaotic world. Execute on the basics and you can grow sales. “Refocus on doing the nuts and bolts well. A clean store, friendly people and machines that work” can go a long way, stressed NACS’ Armour.

You heard it here first; call them ‘mission managers,’ not ‘category managers’ … and focus on what consumers are looking for, not how you stock items.”
—Jenna Freese, Director of Strategy, Numerator

Weight Loss Drugs Don’t Mean Less Shopping

The numbers are staggering: One in six households has a family member who is on or has tried GLP-1 weight-loss drugs like Ozempic, Trulicity or Wegovy. Eight million weekly convenience store customers are currently on a GLP-1 drug, said Jenna Freese, director of strategy at Numerator. And if consumers follow through on their intentions, demand could double, she said.

GLP-1 users don’t just change their own behavior; they also shape the eating habits of everyone in the family, whether at home or on the road.

“We’re already seeing a meaningful change in eating behavior; there has been a 9% reduction in early morning trips,” Freese noted.

But that doesn’t mean that there aren’t opportunities for convenience stores.

“[GLP-1 users] have one big meal a day and then they snack. And who’s the best at offering snacks?” asked McLane’s Hildenbrand. “Us.”

These snackers also are looking for items that fit their diets, seeking out better-for-you items that are high in protein and low in sugar. “They’re not eating less—but with more intent,” said Freese. “This is a shopper on a mission; they are looking for foods that work harder” and have functional properties.

There could be opportunities for retailers to add food high in protein in the grab-and-go and center store areas. But better-for-you items shouldn’t only be targeted to those on weight-loss drugs: 39% of QSR customers say they want healthier items, according to NIQ’s Costagli.

Talk about health without saying “diet,” suggested Freese. And for those who are on weight-loss drugs, market and merchandise food by how it helps someone accomplish goals. Focus on their mission.

“You heard it here first; call [your category managers] ‘mission managers’ … and focus on what consumers are looking for, not how you stock items,” said Freese.

The Difference Is—and Will Continue to Be—Your People

So, how can convenience retailers best face the opportunities and challenges before them? It starts with their people, just like it always has.

“The guest experience is at the cornerstone of everything we do,” said NIQ’s Costagli.

NACS’ Armour agreed: “[Top decile performers] are the ones that pay the most attention to people.”

Those who don’t focus on their people can also find it affects the bottom line. Store-level turnover cost the average store $31,500 per year and cumulatively costs the industry more than $4.8 billion, said Loop’s Goyal.

The challenges of the past five years, starting with the pandemic, also play a role. Many retail companies have deemphasized front-line employees, replacing their most valuable commodity—the personal touch—with self-checkout or other options, whether or not they are embraced by customers. “People forget the value of a satisfactory experience,” said Armour.

The good news is that the decline in customer service across all of retail presents a massive opportunity.

“The bar is really low to execute the most important transaction there is: The relationship between the sales associate and the customer,” said Armour.