Convenience stores face digital, health shifts amid sales decline

The 2026 NACS Show exposed both the pressures and opportunities transforming convenience retail, as operators confront declining sales alongside rising expectations for digital integration and healthier product lines. The event made clear that survival depends on strategic adjustments—whether through technology adoption, smarter product selection, or operational efficiencies—to meet the demands of younger shoppers who now view seamless digital experiences and nutritious options as essential, not optional.

Declining transaction volumes are pushing retailers toward more cautious growth strategies. First-half 2026 in-store sales fell by 4.5% compared to the same period in 2025, according to Chris Rapanick, managing director of NACS Research. While foodservice sales edged up slightly (0.3%), he cautioned smaller operators against expanding high-margin made-to-order programs during this downturn. “Think about commissary, think about other opportunities to make the profits,” he said. For smaller retailers that already have a made-to-order program, Rapanick advised taking a harder look at controlling costs. “Make sure you’re watching your production,” he said. “Don’t throw anything away.”

Digital expectations are no longer optional for younger shoppers

Generations Z and Alpha—accustomed to instant digital interactions—now treat basic conveniences like mobile payments and loyalty programs as standard features, not upgrades. A Wednesday session revealed this expectation gap when younger shoppers were asked which technologies would improve their convenience store experience. Self checkout and loyalty programs led the responses, but online ordering and mobile payments went unmentioned. Crystal Maggelet, CEO of Maverik, interpreted the silence as a sign of how deeply these tools are embedded in daily life. Frank Gleeson, president and CEO of NACS, framed the stakes bluntly: “They’re not even going to ask you for [the technology],” he said. “If you don’t have it, you’re in trouble.”

Health-focused products are now the default, not the exception

The convenience store industry’s traditional focus on indulgent snacks is giving way to a demand-driven shift toward functional, health-oriented options. Gen Z’s health-conscious habits, combined with the growing GLP-1 medication user base, are reshaping purchasing behavior. Jason Zelinski, vice president for North American Retail at NielsenIQ, observed during a panel that younger consumers now visit c-stores primarily for balanced snacks rather than traditional treats.

Suzy Badaracco, president of Culinary Tides, added that financial pressures are accelerating this trend, as more people replace meals with snacks; but only when those snacks meet nutritional needs. “What’s rising is healthy snacking, because what am I doing? I’m replacing a meal,” she said. Just having the healthy options is not enough, multiple speakers noted. Retailers also need to be clear about the benefits of healthy products in their messaging. “You say it’s balanced. It’s portion controlled. It’s nutrient-rich pairings,” Badaracco said.

Protein products dominated the NACS Show floor, with nearly every third exhibitor showcasing new formulations. J&J Snack Foods introduced soft protein pretzels, while Barebells launched protein gummies, and Rich Foods expanded its dispensed beverage additives to include protein liquids. Hydration-focused brands like Capri Sun Hydrate were prominently featured. The trend signals a broader industry evolution: convenience stores are transitioning from quick-fix stops to destinations where health, performance, and convenience converge.

Retailers are also rethinking their physical footprints to match financial realities and changing consumer behavior. Irfan Tejani, CEO of Pinnacle Oil & Gas Holdings, emphasized that expansion strategies, whether through new construction, acquisitions, or remodeling, must prioritize measurable returns. Building new locations only makes sense in strong markets with prime sites and proven profitability, he argued. For smaller operators, acquiring underperforming stores with untapped potential may offer faster gains, while remodeling struggling locations can address immediate customer experience issues without the long-term risks of new development.

However, even well-planned growth stalls without the right infrastructure. Tejani warned that scaling a convenience business requires seamless front-end and back-end systems. “If you do not have the infrastructure, both the front end and back end, it’s going to be a disaster,” he said. “You cannot scale your business, especially a c-store business, with so many moving parts to it unless you have the proper teams managing it.” For chains like Pinnacle Oil, which now operates 120 stores across five states, this means investing in centralized logistics, automated inventory, and data-driven decisions while maintaining flexibility for local market demands. The goal is to create a scalable model that supports both efficiency and adaptability.

New SNAP regulations create compliance hurdles

Margaret Mannion of NACS outlined the industry’s struggles with rule interpretation, particularly for multi-state operators like Pilot Travel Centers. Eva Rigamonti, Pilot’s chief legal officer, pointed to ambiguities in product classification, such as whether canned peas qualify as proteins or vegetables, and whether hard-boiled eggs in to-go containers meet dairy requirements. State-specific waivers and varying local regulations further complicate compliance. NACS has urged the USDA to delay enforcement until retailers receive clearer guidance, arguing that inconsistent rules undermine the program’s anti-hunger objectives.

Upcoming USDA SNAP Stocking Rules Present Challenges for Retailers

The upcoming changes to the USDA’s Supplemental Nutrition Assistance Program (SNAP) stocking requirements have left retailers scrambling for clarity. Starting November 4, stores must carry seven product varieties in each of four health-focused categories, proteins, grains, vegetables and fruit, and dairy, with at least three stocking units for each. This increases the current requirement of three varieties per category and adds a new rule mandating at least one perishable item in three of the four groups.

The store manager’s role is shifting toward operations

Convenience store managers have long juggled customer service with administrative tasks, but automation and centralized processes are now freeing them to focus on core operational responsibilities. Casey’s General Stores and Texas Born (TXB) demonstrated how streamlining functions like recruiting and inventory management can reclaim significant time. Casey’s now uses corporate recruiters to pre-screen candidates, reducing “ghosting” during interviews by 40% and ensuring only qualified applicants reach store managers for final hiring decisions. Sherri Hart, Casey’s VP of HR, noted that standardized recruitment improves both efficiency and hiring quality.

TXB has taken automation further by centralizing inventory scans and fuel price updates, shaving 4-5 hours weekly from managers’ schedules. Nathan Graham, TXB’s director of human resources, described the change as essential in an industry plagued by high labor turnover. The objective isn’t just to reduce paperwork but to enable managers to spend more time engaging with staff and customers, a shift both chains argue is critical to long-term success. For retailers, the takeaway is clear: technology and process improvements are no longer optional cost-saving measures but necessary tools for retaining talent and maintaining service standards in a competitive market.