Convenience-store consumers are searching for value, Nik Modi, analyst at RBC Capital Markets LLC, New York, said. And there are ways c-stores can provide value in the cold vault.
Nearly 30% of consumers said they are doing somewhat worse or much worse financially than they were 12 months ago, Modi said, citing Numerator survey data.
About 46% said they were about the same, but even they are dealing with other pressures in their budget, from higher insurance costs to higher mortgage costs and more, he said.
“And it doesn’t matter what group they were in—worse, same or better—in terms of how they felt,” Modi said. “People are pretty much cutting back across the board. They're cutting back on restaurants and bars, fast-food delivery meals, going out, groceries, even travel and tourism. So what started off as a low-income issue has start started to bleed into the middle- and higher-income classes.”
Modi, who spoke at CSP’s 2025 Convenience Retailing University (CRU) in February in Nashville, Tennessee, shared what convenience stores can do to sell more beverages while consumers are feeling financial pressures.
“It’s very clear that consumers are feeling the pressure,” he said. “So, what is a non-value channel to do? That’s the question for everyone in this room. Obviously, the convenience-store industry is not known to be a value-base channel… so what do we do?”
Here are four areas from Modi on where to focus.
Leverage Foodservice to Drive Packaged Beverage Sales
As inflation is high and restaurants are under pressure, more people are staying home, and there’s an opportunity here to leverage c-stores foodservice programs to drive packaged beverage and alcohol sales. Just like during the COVID-19 pandemic, Modi said, c-stores can co-merchandise their packaged beverages with foodservice items and bring experiences to people’s homes.
Some of the most popular products in retail now are restaurant-branded food items, Modi said.
“People are trying to replicate out-of-home experiences in the home…. How do you bring experiences into the home?” he said.
C-stores could sell charcuterie boards, for example, Modi said, and pair that with alcohol.
“Leverage foodservice to drive package beverage sales because consumers are moving their dollars from out of home, into home,” he said.
Lean Into Hot Spots
Some of the hot beverages today are the same as last year, Modi said. Those include energy drinks, ready-to-drink cocktails, hard teas, rapid rehydration, protein, cocktail mixes and low-alcohol beer, wine and spirits.
But there are two other segments to watch in 2025: Gut drinks and small bottles, he said.
Having smaller bottles for alcohol items like wine and spirits can drive trial, he said. It allows the consumer to trade down without trading out of the segment.
“Small size bottles are going to be a critical, critical area to grow and to keep up transactions and traffic,” Modi said.
Improve Lift on Promotions
To improve the lift on promotions, c-stores should focus more on which consumers are buying most beverages: Those ages 55 and older.
Gen Z, Gen Alpha and millennial customers are important, but “the majority of your volume is being purchased by older consumers,” Modi said.
Retailers need to consider physical promotions in the store over digital to cater to this age group, he said.
“There's a fundamental mismatch in terms of who needs the value and where the value is being offered. Of course, the younger consumer wants value, but we're talking about fishing where the fish are,” Modi said.
Expand Merchandising Calendar
There are many opportunities to activate c-stores consumers through merchandising around key holidays—and this needs to go beyond Memorial Day, the Fourth of July and Christmas.
Modi said there’s a missed opportunity with the 25-plus other holidays celebrated in every state during the year like Diwali.
“Why are you not more active in merchandising around some of these key events so you can activate your local consumer?” he asked.
C-stores might not have initiatives for every holiday at the chain level, but they can cater to what their local demographics want, Modi said.
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