When a doctor sounds the alarm that something is not OK, the patient tends to listen. So when Varish Goyal, the CEO of Loop Neighborhood Markets, a NACS executive committee member and a medical doctor, gave a diagnosis on the U.S. c-store industry a year ago, it was an attention-grabber.

When he took the stage last year, his prescription to NACS State of the Industry Summit attendees was to “tighten your belts, fight for every sales dollar and cut expenses.” Otherwise, the year was going to be really tough.

And he was correct. At the time fuel gallons were down … inside sales were down … foodservice wasn’t growing … expenses were up … transactions were down.

Thankfully, as 2024 progressed, a cure for what was ailing the industry kicked in and better results arrived by July and August.

Goyal returned to the stage this year at the NACS SOI Summit to recap the convenience retail industry’s operational, financial and performance metrics in 2024. “Q3 brought improvements and Q4 was significantly better than expected,” he said.

2024 Performance Overview

Goyal’s diagnosis last year suggested that the industry’s 21-year streak of record inside sales would end. Turns, out he was happily incorrect.

“We’re a resilient industry, and the second half of last year was amazing and total inside sales grew 2.4% to continue our streak, which is now 22 years,” he said.

Industry-wide, however, total sales were down 2.3% in 2024—a second year of decline—but like 2023, the decline was due to the 5.7% decrease in fuel sales, driven by the 6.5% decrease in the average fuel price ($3.55 per gallon in 2023 vs. $3.32 in 2024).

“I can’t think of any other industry that could see a $70 billion decline in revenue and still remain profitable,” said Goyal in reference to the decline in fuel sales, which dipped from $859.8 billion in 2023 to $837.4 billion in 2024.

U.S. Energy Information Administration (EIA) data showed that fuel consumption in Q1 2024 was below 2023 levels, although the gap closed toward the middle of the year and the final result was a slight increase in 2024 compared to 2023. Diesel consumption remained volatile and below 2023 and 2022 levels.

For the current year and 2026, the EIA forecast for both gas and diesel price and demand shows marginal short-term growth in fuel consumption.

“If this holds up, what we see is that in 2025 fuel prices remain steady, but we’re going to see a positive bump in fuel demand. In 2026, both gas and diesel prices are expected to decline, but diesel consumption is showing a little bump in improvement,” explained Goyal.

Fuel margins also held strong in 2024, with the average margin growing by 4.6% to 43.5 cents per gallon. “It never dipped below 30 cents a gallon,” said Goyal, noting that 40 cents may be the new average fuel margin moving forward.

Industry Watchouts

Historically, within the c-store industry when fuel prices and transactions go down, so do credit card fees.

“That’s not what we saw in 2024—our credit card fees were higher by $400 million, even though we had a decline in fuel prices and pump transactions,” said Goyal, adding that consumers are using cash less frequently both on the forecourt and inside the store, resulting in cards being used for 80.8% of transactions in c-stores.

Direct store operating expense (DSOE) growth slowed in 2024, but DSOE was still up $9.8 billion to $159.9 billion.

Through a per store, per month lens, repairs and maintenance within DSOE was up 10.2% in 2024, a signal that good help is hard to find. “It is becoming harder to find good contractors to do the work, and it’s also becoming harder to find materials at a good price,” said Goyal.

In 2024, facility expenses grew at a rate “more than double the entire category of direct store operating expenses,” with depreciation and amortization having a significant impact—a 13% increase in 2024, or $13,661 per store per month.

The largest expense within DSOE, wages and benefits, showed improvement in its rate of growth. “Wage growth has finally slowed to a single digit rate, which is a positive sign that our labor market may be starting to improve,” said Goyal. He cautioned, however, that a 3.4% increase in wages still equates to a $1,331 per store, per month increase within that expense.

The costs associated with health insurance and other benefits, such as referral bonuses or tenure bonuses, also increased double digit rates in 2024. “This has been the case since 2020, and I think it will likely remain as efforts to recruit and retain employees continues to be a focus for our companies,” said Goyal.

Goyal called out foodservice spoilage, which has increased by 42% over the last three years. As the industry continues to double down on foodservice, this is an expense to keep an eye on.

2024 Key In-Store Performance Metrics

Taking a look at in-store performance, Goyal noted that 1.2% growth in inside transactions “is a signal that things may have changed and our industry is back to growth mode. … Not only did inside counts grow year over year, but we’re seeing them move to the upside against 2020 through 2022.”

On the forecourt, per store, per month pump transactions were down -1.4% due to lower average gas prices for the year compared to 2023. Combined with inside transactions, total transactions were up 0.5% per store, per month in 2024. “So even though we saw a decline in pump transactions, inside growth more than compensated for that, which is great news for the industry,” said Goyal.

Labor continues to be a top industry concern, and more retailers are increasing compensation in 2024 as a way to both hire and retain employees. “If we compare back to 2020, personnel expenses increased over 39%” in that time period, said Goyal.

Employees were more productive in 2024, indicated by 3.3% per store, per month growth in inside gross profit per labor hour—that’s the positive. The negative, however, was the growth in wages and benefits: “This expense as a percent of gross profit dollars also marginally increased—a result of faster growth in personnel expenses versus growth in total gross profit,” he said.

Wrapping up labor metrics, there was mixed news regarding turnover—and its associated cost. “Our industry is spending $4 .8 billion due to turnover,” said Goyal, which he said was likely a conservative number.

In 2024, non-manager turnover declined by 12 points and manager turnover declined by 0.8 points. “This is good news. The labor markets may actually be improving, and we may be getting a respite from this high turnover and tight labor market,” said Goyal.

“Our team leader’s job is difficult. When we find the right person, we need to do whatever we can to keep them,” he added.

Building More Profitable Baskets

Goyal offered several metrics to monitor and measure throughout the year on the path to generating more in-store operating profit.

Focusing on transactions is the “basis of our business,” he said, noting that growing transactions counts is a core strategy.

Basket profitability, which is “a game of pennies,” he said, can be attainable by setting a goal of increasing basket value by just three or four cents per transaction over a given period of time. “It will be easier to understand, and over time you will be able to make an unprofitable basket profitable,” said Goyal.

Employee turnover costs $31,000 per store, per year. Getting a handle on retention is a good first step in reducing expenses and building overall basket profitability. “Then you want to also look at expenses that are controllable,” such as supplies, advertising and promotions.

“If you commit to monitoring these things, your in-store operating profit should begin to improve,” he said.