The Supply Side: Convenience stores see reduced traffic to start 2026

The convenience store retail segment has been one of the fastest-growing over the past decade, with more than 152,000 stores nationwide and annual sales of more than $170.6 billion, according to NielsenIQ.

As 2026 gets underway, NielsenIQ reports the convenience segment is facing a demand problem as 33% of consumers say they are visiting less often, and trips per buyer declined 2.2% at the end of 2025. Convenience store sales declined in dollars and volume last year.

“Speed is no longer enough,” said Chris Costagli, vice president of thought leadership at NielsenIQ. “C-stores must deliver experiences that feel worth the stop, not just fast.”

One in two said high prices were the biggest reason for fewer visits, 41% said they are avoiding impulse purchases, and 22% said they are going out less often. Nielsen found that 17% are buying less alcohol, and 16% said health goals have kept them away. Also, 13% cited limited selections as the main reason they go less.

Costagli said the value equation should focus on putting the right products, at the right prices, around the right shopping missions.

“Convenience is shedding its vice-based past, as price fatigue bites, label literacy surges, electric vehicles curb pump trips and GLP-1 reshapes appetites, shoppers now define value as wellness, credibility and time well spent,” Costagli noted.

Convenience stores have historically been a must-stop for tobacco, beverages and alcohol, making up 94% of the segment’s sales. Nielsen reports that alcohol sales are down outside of the convenience segment. Excluding beer sales, which are down in the convenience segment, other alcoholic beverage sales grew 0.3% year over year, totaling $31.3 billion. Liquor store and grocery store liquor sales declined 2.2% over the past year, and the mass retail segment showed a 4% drop in liquor sales.

Nielsen reports that consumers are drawn to convenience stores for faster shopping, quick trips and to purchase cold drinks. New ready-to-drink alcoholic beverages like Simply Spiked or Jack Daniel’s Coca-Cola have become popular with younger consumers, driving $300 million in annual sales.

Cannabis-infused beverages are also gaining traction in states like Missouri, where the law permits. The drinks often contain THC, Delta-8, or CBD, emerging as alternatives to alcohol, aligning with broader trends in moderation and wellness. Nielsen said the drinks saw sales increase 486% in 2025 from the prior year.

So-called functional beverages, including energy drinks and wellness-focused formats, are also surging. Energy beverage sales in the convenience segment increased 7% from a year ago and now outpace soft drinks. Functional beverage sales were up 5% year over year, according to Nielsen data.

The data analytics firm also reports that the better-for-you food options are doing well in the convenience store segment, with double-digit growth last year, with above-average gains for protein products and gluten-free items.

“Shoppers are clearly signaling what they value, but the convenience segment is only partially meeting the demand,” Nielsen reported. “Wellness is a backbone, not a niche set of items. For convenience stores, this marks an inflection point to evolve into a wellness-led convenient shopping option.”

Prepared food has also been a big trip driver for the convenience store segment, generating more than $19 billion annually, but sales were down 2% last year. Nielsen said the decline highlights a relevance problem for the retail segment. While 37% of consumers plan to cut back on eating out, Nielsen notes that convenience stores can still benefit as 15% said they would buy prepared food, 13% would purchase specialty coffee and 12% would stop to buy dispensed beverages.

Nielsen asked consumers when they most likely would choose a convenience store: 82% cited a fuel purchase, 50% said snacks, 44% stopped in for hot beverages, 43% cited fresh prepared foods like a pizza or bakery item and 40% said they stopped in for fountain drinks.

Loyalty programs are also a big draw for consumers in the convenience segment. Nielsen said Generation X, consumers aged between 46 and 61, are the most valuable age demographic for convenience stores. Nielsen said Gen X shoppers show loyalty to branded products and dominate in key categories such as non-alcoholic beverages, salty snacks and alcohol, making them a strategic target for convenience store retailers.

“The convenience channel is no longer just a quick stop — it’s a dynamic, data-rich environment where innovation, consumer behavior and generational influence converge,” Nielsen reported.

Despite slower-than-expected growth, convenience-store retailers of all sizes are expanding their footprints. The largest player, Irving, Texas-based 7-Eleven Inc., operates more than 9,300 U.S. stores. The company said in August it planned to add 200 more U.S. locations by 2030. The company is investing in more distinctive food offerings and online ordering potential.

El Dorado-based Murphy USA said this month it planned to add 50 new, larger stores and complete 30 rebuilds this year on the heels of 51 new locations opened in 2025. Murphy USA ranks No. 4 in size for store count in the United States with 1,800 locations.

“These larger stores are delivering higher merchandise dollars, higher fuel contribution—they do come with higher operating expenses, but they also come with higher EBITDA (earnings before interest, taxes, depreciation and amortization),” said Murphy CEO Mindy West.

West said the larger 2,800-square-foot size allows the company to diversify its product mix, offering more fresh food and beverage items.

Walmart has also recently expanded its c-store and fueling station footprint, adding 45 new convenience/fueling formats last year, with the retailer now having 450 locations. The retailer has said that it would like to eventually have a fueling station located at as many Neighborhood Market grocery formats as possible. The company operates around 690 Neighborhood Markets in 31 states.

Walmart is updating fuel pumps at its c-store locations with more modern, larger screens that allow for more advertising and promotional sales for the company’s advertising business.

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics.