NACS Show Insights

While I love the fun and food of the show floor, and seeing so many friends in one place the State of the Industry update is always my favorite session. Chris Rapanick does a masterful job of translating mountains of data into sharp insights that provide instant clarity to key issues. This year he sure didn’t disappoint and I will do my best to summarize the high points, but recommend you get the real data from the real deal and work with NACS and Chris.

We have been talking about building resiliency into our retail businesses by expanding inside sales and adding an array of foodservice options for the 25 plus years I have been in the business. So where do we stand this year? What can convenience retailers do if and when fuel margins normalize or volumes finally see demand destruction from EV’s and efficiency? Can inside operations stand on their own?

At the 2025 NACS Show, Chris delivered one of the most data-driven, candid looks yet at this reality — combining decades of benchmarking, transactional analytics, and front-line experience into a clear challenge:

“It’s a pennies business — can we add five cents to the basket and take two cents out of expenses, every transaction, every day.”

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The Industry’s Core Equation Has Evolved

Fuel has carried the convenience business for decades and for many continues to do so. Margins near $0.40 per gallon this year still look healthy, but with fuel prices down 8% year-to-date, pump transactions are down, and total industry transactions are off 1.5%.

That matters because the average store would currently lose about $7,800 per month on inside operations if not for fuel. Without that margin “float,” the average inside operating profit per transaction is –$0.32.

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Fuel Margins and the Inside Story

Metric	2025 YTD	Direction
Fuel Margin	~$0.40/gal	Still holding at higher than historical and driving financial results
Fuel Volume	+1.7%	Slight growth despite expectations of demand destruction long term.
Fuel Price	–8%	Driving fewer visits as customers fill up.
Inside OP (no fuel)	–$7,800/mo	Negative trend, Average site loses money if the inside gross profit had to carry the whole store.
Inside OP/Txn	–$0.32	Driving this to zero or positive remains an elusive goal operators outside of the top quartile.
Basket Value	$8.43	With inflation fatigue setting in retailers need to grow via adding items not just raising price.
Labor/Txn	$1.40	Major controllable expense
Operating Exp. Growth	+200% (5–6 yrs)	Structural pressure that has been relentless

Chris framed the issue simply:

“If you’re going to have a viable business that’s profitable in the long term, you have to grow the left-hand side faster than the right.”

Inside gross profit dollars must outpace expense growth — or the business becomes structurally dependent on fuel.

If the industry were to lose just $0.05 of fuel margin over the next six months, total profitability would compress sharply. That’s why the most resilient operators are those pushing to make the inside P&L stand on its own.

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Expense Discipline as a Path to Profit

Cutting costs delivers faster impact than chasing sales. Supplies are up 2–3% this year versus a 1.4% benchmark. Repairs and maintenance can be deferred strategically. Card fees — now linked to tender mix, not fuel prices — are rising as 82% of inside sales dollars are paid by card.

The practical takeaway: benchmark every expense line against NACS averages. If a store’s supply costs are half a point above peers, that’s likely leakage, not necessity.

Chris’s most direct advice to retailers:

“Go look for the places where you’re spending more than the average and find out why. There may be a good reason — but if not, fix it.”

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Ideas to Find Growth Inside the Store

1. Focus on the 75% of transactions that include nicotine, packaged beverages, or beer.
   • Nicotine basket: $8.75
   • Packaged beverages: $2.80
   • Beer: >$10
2. Basket-building beats price hikes. Consumers are fatigued. A $1.99 candy bar that becomes $2.49 gets noticed; an item upsell doesn’t.
3. Shrink and waste are surging.
   • Shrink up another 8% this year; now ~$2,000 per store per month.
   • Foodservice waste >$25,000 annually (≈$2,500/month).
     Both require process discipline, not just tighter locks.
4. Foodservice is slowing.
   • Sales up 2.1%, GP lagging behind. Inflation’s tailwind gone (down from 8%+ to ~2%).Competition from QSRs intense — 28% of convenience shoppers buy an item in-store, then go elsewhere for food. Consumers cite variety as the #1 reason for defecting.
   The winning strategy: known, stable signature items, e.g., a $5 tenders deal that’s consistently executed.
5. Car wash is the quiet hero.
   Profitable, scalable, and subscription-friendly — a diversification play with growing private-equity interest.

Labor: Culture Beats Cost

Turnover is still ~100% annually. This is not new for our industry but when you dig into the range of performance across companies a clear correlation arises and what is true at one end of the performance spectrum is clearly not true at the other end. But, does correlation mean causation?

The message was, yes, there is clear evidence that by leading with culture and values top quartile financial performance is in no small part being driven by retention. The performance gap between top and bottom deciles is 95.5 points! The durable edge is culture, recognition, and promotion pathways that stabilize teams and improve execution, but you also have to deliver the money, top performers’ loaded wage was ≈ $23/hr—a full $5/hr higher than the bottom tier.

Regional Reality Check

Migration is quietly redrawing where the convenience model works best — and where differentiation is essential. Migration fuels outperformance in the Carolinas, Florida, Texas, and Utah. The Northeast faces tougher comps and competition, but some are containing costs (e.g., supplies –5%) and leaning into frozen dispense, one of the few foodservice bright spots there.

Growth regions — Carolinas, Florida, Texas, Utah— show stronger transactions and inside sales.

Northeast and West lagging.

Benchmarking: A Competitive Advantage

NACS’s data infrastructure is one of the industry’s greatest shared assets. Every retailer, from single-store operators to national chains, can benchmark against the top decile via:

• State of the Industry (SOI) Report — same-day access via NACS.org. NACS → State of the Industry
• CSX Convenience Benchmarking — mid-year data for real-time comparison. Explore CSX →
• SOI Summit (Illinois in 2026) — free registration for data contributors. Summit details →
• Operators that participate not only receive two free SOI reports but also gain the ability to compare against top performers and understand why the best stores stay profitable when others struggle.

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The 2025 Checklist

Chris closed with pragmatic optimism:

“Flat or slightly above inside metrics this year should be considered a success.”

Fuel volumes are unlikely to rise more than 1.7%, inflation is easing, and the pricing lever is largely gone. The path forward isn’t about chasing gallons or stretching price points — it’s about operational precision and data-driven discipline.

Focus for 2025 success:

• Benchmark relentlessly.
• Tighten controllable expenses.
• Grow inside GP faster than expense lines.
• Focus on units, not prices.
• Invest in people and process.
• Diversify through services like car wash not just foodservice.

NACS’s continuous data efforts give the industry a clear mirror — one that shows both how far we’ve come and how much sharper we’ll need to be as fuel’s role diminishes.

The future of convenience retail isn’t about gallons — it’s about grit, execution, and the next penny of inside profitability.

Thank You to NACS & Chris

We’re fortunate to have NACS continuously aggregating, normalizing, and opening up meaningful benchmarks across our industry. And kudos to Chris for a clear, candid presentation that respected the numbers and the operators equally. This is the kind of pragmatic leadership our sector needs.

Note: This analysis reflects NACS benchmarking themes and Chris’s presentation at NACS Show 2025. Any errors in interpretation are mine.