What Can the Convenience Channel Expect in 2025?
NATIONAL REPORT — The new year brings with it promises of the new and exciting. For convenience stores, the new and exciting includes innovative products and technologies to keep customers coming through the doors again and again.
So, what can the convenience channel expect in the coming 12 months? Food with an international flare seems to be leading the pack, as well as a continued use of artificial intelligence (AI) to better understand — and meet — consumers' demands.
Here is a sampling of trends to watch for, according to industry insiders, in 2025.
On the Retail Fuel Radar for 2025
As Paul Lauinger, vice president, sales, North America at Franklin, Tenn.-based Titan Cloud points out, operators in the retail fuel industry will need to either adapt to rapid change or risk falling behind.
[Read more: Fuel Retailers Prepare Today for the Forecourt of the Future]
"From leveraging AI [artificial intelligence] and automation, to developing employees into brand ambassadors, to elevating the 360-degree customer experience, staying ahead means mastering the dynamics to not only foster growth but also redefine the future of fueling," he explained.
So what changes are on the horizon? There are several trends shaping 2025 that operators need to focus on to overcome challenges and turn them into opportunities, according to Lauinger. In his words, they are:
1% Write-offs Are Over: In the coming year, more retailers will turn to automation as a way to pinpoint inventory variance issues, including fuel loss root cause.
Artificial Intelligence Goes Mainstream: For fuel retailers under pressure to improve margins without a steep learning curve, the choice will be easy in 2025: Fortify workflows with easily implemented AI solutions to provide measurable, near-term ROI — all while keeping pace with, or surpassing, data-driven competitors.
Mid-Market Enters the Innovation Race: Enterprise-level technology isn't just for the big players. This year, midmarket fuel operators will adjust even the tightest budgets to level the playing field with automation. The payoff? Streamlined operations, centralized data analytics and faster invoice reconciliation, all combining to optimize fuel operations from end to end.
Workforce Development Gets Real: Convenience store leaders have been steadily upping their game to provide top notch offerings for customers. This year, that investment will extend into training the folks who bring that experience to life each day.
Brand Emersion is the New Customer Experience: In 2025, customers will be more likely to see a professionally trained chef prepping meals to order, perhaps in an open kitchen. While they wait, they may try food samples offered by concierge staff member walking the floor. Beyond grocery items, ambiance will be a top priority in the coming year.
Getting Smarter With AI
Jim Kaskade, serial entrepreneur and CEO of AI provider San Mateo, Calif.-based Conversica, sees AI continuing to have an impact on retail. According to the technology executive, retailers will use AI algorithms to predict consumer purchasing behavior based on data from previous purchases, browsing history, social media activity and even real-time contextual factors like location and weather.
Additionally, physical retail spaces will be equipped with advanced sensors, computer vision and AI to enable customers to walk in, pick up items and leave without traditional checkout processes in a larger number of countries around the world.
Waking Up the Taste Buds
According to Datassential, 71% of consumers are excited about new food and beverage trends in the new year, with Generation Z (78%) reporting they are more excited than baby boomers (59%). In its "2025 Trends Report," the Chicago-based company outlines the top 10 2025 food, flavor and beverage trends. They are:
- Pastina, a category of small pastas
- Sweety drop peppers, mall, tear-shaped, vibrant, Peruvian peppers known for their sweet flavor and mild heat
- Chow fun, a Chinese dish traditionally consisting of stir-fried rice noodles, a protein, vegetables and a sauce
- Pikliz, a spicy, Haitian, pickled condiment or slaw
- Orange wine, made from white grapes that are fermented with their skins on
- Yerba mate, a South American herbal tea made from the dried leaves of an evergreen tree steeped in hot water
- Bonito flakes, made from filleted, dried, fermented, smoked skipjack tuna
- Saffron, a spice made from the dried, red stigma and styles of the saffron crocus flower
- Next-level fat washing, a cocktail-making technique that involves taking a fat or and infusing it into alcohol, freezing the concoction until the fat solidifies, and then skimming the fat off
- Short ribs, cuts of beef taken from the lower rib area that are known for their rich marbling and tenderness when slow-cooked or braised
The Big C's: Consumer Spending, CPGs & Channel Competition
With more than 20 years in the food distribution and manufacturing business, Keith Daniels, managing partner at New York-based Carl Marks Advisors, has experience tracking consumer spending and its impact on the food and grocery sector.
As he noted, "We've seen consumers gravitate toward lower-priced store chains and products. Walmart's grocery business has benefited from this significantly. On the other hand, drugstores are really under a lot of pressure right now."
Why? Drugstores have traditionally had higher prices for goods and relied on foot traffic from customers prioritizing convenience, Daniels explained. "Now, that rationale has shifted for many consumers as they prefer shopping online and places like Walmart that offer lower prices," he said, adding companies with strong private label offerings and competitive pricing could win the day.
He also points to the recent November presidential election and any possible tariff implementations under the new administration.
"A lot will depend on the nature of the tariffs that are implemented, but the impact, certainly in the CPG [consumer packaged goods] sector, will depend on the ability of companies to move their sourcing from China to Vietnam, Mexico or here in the United States," Daniels said.
"From a policy perspective another agency we are watching is the FDA [U.S. Food and Drug Administration]. We have to see how it plays out, but any major shifts in enforcement or banning of certain ingredients could impact farmers, supermarkets and CPG companies," he added.
On the Menu
Alto-Shaam, the commercial kitchen technology company, has identified the emerging culinary shifts that are set to move into mainstream influence in menu management nationwide as hope appears on the horizon for the industry.
[Read more: Convenience Retailers Navigate the Ins & Outs of Menu Development]
According to the Menomonee Falls, Wis.-based company, the top five trends that will shape menu innovation in 2025 are:
- Stealth Health & Super Foods: Gen Z is demanding healthier and more sustainable options compared to older generations, including an increase in alcohol-free drink choices.
- Cultivating Global Connections: The rising popularity of food tourism is fueling consumer curiosity to experience authentic flavors from across the globe.
- Elevated Dining & Upscaling Ingredients: Social media is influencing consumer aspiration levels, driving them to new heights and sparking a surge in luxury dining. This includes the desire for high-quality ingredients, as a result of increased awareness and global food knowledge.
- Harmonizing Heat: A desire for bold and complex sauces and spices has hit the United States in recent years. This follows a new love of customization, indulgence and comfort in the U.S. Diners are also expected to embrace the full complexity of peppers in 2025.
- Limited-Time Offers (LTOs): Increased LTOs will offer diners an affordable opportunity to enjoy eating out, making it more accessible for those who may have previously found inflated prices out of reach.
Unpacking Packaging Trends
According to research by Trivium Packaging, 82% of consumers are willing to pay more for sustainable packaging, seeking out brands that share their value system. Gen Z consumers are even more willing, leading at 90%.
With that in mind, the global aluminum packaging outlined some key packaging trends for 2025, notably, transparency in sustainability initiatives will be big this coming year as many companies look to show off their green improvements in product, packaging and manufacturing.
Technological integration is also making waves in the packaging sector, and Trivium is seeing more smart labels and indicators that can provide additional information about a product's quality, a brand’s values and education on packaging sustainability.
Other trends to watch include minimalist designs, minimalism in packaging and products, and refillable packing models.
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