Small Operators Enter 2025 With an Improved Outlook
NATIONAL REPORT — Increasing operational costs and uncertainty over the future state of the U.S. economy are keeping the convenience store industry's small operators (those operating 20 stores or less) up at night as they head into 2025, according to the 2025 Convenience Store News Forecast Study.
On a scale of one to five — where 1 represents "Terrible, wake me up when it's over" and 5 represents "It's going to be our best year ever!" — the largest percentage of small operators (48%) rate their expectations for this year at a 3. While the foremost rating last year was also a 3, the number of small operators choosing this option rose 5 points year over year.
In the good news column, fewer small operators opted for a negative rating this year. The percentage selecting a rating of 1 or 2 went from 19% last year to 10% this year. Similarly, the percentage who think 2025 is going to be their best year ever rose 6 points to 19%.
Interestingly, this figure is higher than among the industry's large operators, only 6% of whom think 2025 is going to be their best year ever. Large operators in general, though, are more optimistic; the largest percentage rate their expectations for the year at a 4 out of 5.
While still concerned about inflation and national economic issues, the industry's small operators have a better outlook on the U.S. economy than they did last year. Those who say they have a very/slightly negative outlook dropped 12 points year over year, though the total still stands at 42%. Those with a very/slightly positive outlook increased by 7 points to 29%.
"The economy is getting better and prices are coming down," one small operator remarked.
Despite this improvement, large operators are more bullish on the economy than small operators as 44% say they have a very/slightly positive outlook, up 21 points from a year ago. Those with a very/slightly negative outlook, meanwhile, dropped 24 points year over year.
Areas of Opportunity
Each year, the Forecast Study asks c-store retailers to identify the issues that will have the biggest impact on their sales and profitability in the year ahead. Along with concerns about rising operational costs (ranked No. 1 this year) and some hesitation around the economy (No. 2), labor issues such as hiring and retention continue to challenge small operators. A positive change, however, is that this issue fell from No. 1 last year to No. 3 this year among this group.
In spite of the challenges, both small and large operators anticipate growth in sales per store in 2025 — 65% of small operators and 68% of large operators expect an increase. Only 3% of each group foresees a decrease in sales, while the remainder expect the status quo.
[Read more: The State of the Small Operator: Overcoming Obstacles]
On the contrary, a notable divergence emerges in profit expectations where small operators display less confidence than large operators: 56% of large operators expect to see their average profits per store rise in 2025, compared to 42% of small operators. A larger percentage of small operators (45%) expect their profits to stay the same vs. 32% of large operators.
It's a similar story when it comes to in-store foot traffic expectations where more large operators expect to see a change for the better: 59% of large operators anticipate stronger foot traffic this year (up a whopping 26 points year over year) vs. 45% of small operators (up 13 points).
"Big name c-stores are moving in," one small operator noted as a reason for pessimism.
Without the deep pockets of the industry's largest chains, small operators are taking a measured approach to new investments in 2025. Technology appears to be an area of priority — likely in response to the various customer-driven advancements rolled out by competitors over the last few years. Tech also can help small operators improve operational efficiency.
While the majority of small operators surveyed indicated that they already offer mobile pay both in-store and at the pump, ordering via mobile app and curbside pickup are the leading enhanced convenience services that small operators plan to add in the year ahead. Large operators, on the other hand, plan to focus on contactless shopping options and third-party delivery.
The industry's small operators are taking a measured approach to expansion in 2025 as well. Only 36% expect to increase their store count this year, down 5 points from a year ago. That compares to 68% of large operators who plan to expand.
The majority of small operators (58%) intend to stay at the same store count. However, 6% say they will either decrease their store count or exit the industry in 2025.
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