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C-stores are facing a significant problem, at least according to the latest data presented in the Convenience Store News Midyear Report Card for 2025. Produced in conjunction with NielsenIQ, the report examined dollar sales and unit volume metrics spanning January through June of this year, and the results looked decidedly less than rosy.
"The outlook for 2025 is less clear. At first glance, things look fairly grim as a slight majority of key categories saw both dollar sales and unit volume go negative during the first half of the year and the remaining ones turned in mixed performances," the introduction to the report card read.
Still, there were a few silver linings attached, and the report's author, Angela Hanson, also added a caveat to the above statement before pivoting to address the rampant uncertainty plaguing both the c-store segment and the broader economy in a variety of ways.
"Yet it would be a mistake to say things are getting worse across the board. Some categories stayed negative yet slowed down their rate of sales decline, and some individual segments saw striking improvement. The big question that retailers need to consider is whether the industry is coasting to a soft landing or if there is significant turbulence still ahead," Hanson added.
C-Stores Midyear Report Card 2025: Nearly All Categories See Sales Decline
There was a sea of red splashed along the top line for nearly each broad product category examined in the c-stores report, with a few exceptions. Digging deeper into the numbers:
Cigarette dollar sales dipped by 2.7% versus year-ago levels, and unit volume declined by 7.7%. Economy or value cigarettes were the sole subcategory to improve as smokers traded down, gaining 10.8% in dollar sales and 8.5% in unit volume. In the other tobacco product category, dollar sales actually improved by 5.8%, however, largely bolstered by large gains in the smokeless tobacco alternatives (+43.4%), rolling papers (+6.1%), and pipe and cigarette tobacco (+5.8%) subcategories.
Packaged beverages saw a mild dollar sales increase of 1.9%, set against unit volume declining 1.2% — energy drinks and enhanced water were the players which saved this category. Meanwhile, beer and malt beverages tumbled by 2% in terms of dollar sales and 2.2% in terms of unit volume, with all subcategories falling on both metrics.
Candy saw both dollar sales (-1.7%) and unit volume (-6.5%) decreases, as did salty snacks, which exhibited a dollar sales decline of 4.3% and a unit volume drop of 5.8%. Edible grocery saw both metrics roll back (-2.4% and -2.9%, respectively, with flavored water enhancers being the only notable growth subcategory), as did non-edible grocery (-2% on dollar sales and -5.3% in terms of unit volume).
Finally, general merchandise exhibited a dollar sales downturn of 1.2%, despite slight improvement in unit volume of 0.3%, and health and beauty observed a dollar sales boost of 2.3%, offset by a 1.9% tumble in unit volume. Grooming aids, personal hygiene items, and vitamins/supplements kept this category relatively stable.
Uncertainty was the word used to describe the outlook for H2, with Hanson quoting NRF chief economist Jack Kleinhenz on the subject.
"Uncertainty is pervasive," Kleinhenz said, singling out the turbulence created by a shifting tariff situation, immigration policy, and deregulation efforts as primary factors creating a lack of surety.
"The good news is that economic fundamentals 'appear solid,' according to Kleinhenz. Additionally, core retail sales and personal income were up as of May, and the labor market beat expectations in June. Meanwhile, market research and advisory firm Circana reported that pricing remains largely stable with limited impact from tariffs as of June, while consumer sentiment improved somewhat but remains cautious," Hanson concluded.