C-store Beverage Sales Face Some Pressures
NEW YORK — Uncertainty over the economic environment and its impact on the consumer is spilling over to beverage category.
Goldman Sachs' "Beverage Bytes" first quarter retailer survey, beverage sales in the in the convenience channel decelerated to +1% vs. +2.8% in the final quarter of 2024. This in turn drove convenience store retailers' expectations for growth this year lower compared to the fourth quarter 2024 survey, according to Bonnie Herzog, managing director at Goldman Sachs.
The recent "Beverage Bytes" survey represents approximately 42,000 retail locations or roughly 28% of the c-store channel.
"Retailers' more conservative growth outlook this year is not surprising and is driven by tempered traffic growth expectations — reflecting weaker consumer sentiment and the associated pullback in spending given the challenging (and volatile) macro environment," Herzog explained.
One bright spot remains the energy drink category and "encouragingly, retailers indicated that industrywide trends further accelerated in Q1 to +7% (vs. +6% in Q4)," she added. "Despite this, retailers still expect energy drink category growth of 7% this year — in-line with our Q4 survey — though slightly faster growth vs. 2024 (+6%)."
[Read more: What You Need to Know About Changing Alcoholic Beverage Consumption Trends]
The "Beverage Bytes" Q1 survey also found:
- The pricing environment remains broadly healthy/rational across major beer/flavored malt beverage manufacturers, with most retailers expecting incremental pricing by brewers this year — though largely at moderate (less than 3%) rates.
- More retailers (57% vs. 46% in Q4 2024) are seeing promotional activity pick up in the nonalcoholic space, and retailers now expect manufacturers will have to start to promote more this year (vs. push through more pricing). This is in slight contrast to the Q4 2024 survey, where retailers were evenly split on manufacturers' ability to push through more pricing.
- Fewer retailers (36% vs. 55% in Q4 2024) are also seeing an uptick in promotional activity in alcoholic beverages, and the majority of retailers (67% vs. 40% in Q4 2024) expect brewers will push through incremental pricing this year.
- Retailers are incrementally more cautious on their outlook for traffic this year, as expected, with traffic now expected to grow by only 0.1% compare to 2.7% in the fourth quarter 2024 survey, reflecting increased macro uncertainty and a pullback in consumer spending.
- Retailers expect to allocate more space to nonalcoholic beverages this year (+1%), led by energy drinks, with similar shelf/cooler space growth trends expected for alcoholic beverages.
- Beer category sales decelerated in the first three months of 2025 compared to the previous quarter, which in turn drove a slightly more tempered growth outlook for the category this year.
- Hard Seltzer category growth was down 6% year over year in the first quarter (vs. flat year over year in the fourth quarter.
While optically slower total beverage sales growth trends in the c-store channel is a bit concerning, Goldman Sachs thinks this broadly expected considering recent headlines indicating that consumer sentiment is increasingly under pressure, according to Herzog