The convenience store industry has long operated on a reliable, if predictable, foundation. For decades, the Big Three categories of tobacco, gasoline, and alcohol have acted as the primary anchors for the channel. But as we move into 2026, this bedrock of the industry is shifting.

Consumers are no longer just stopping for beer and smokes while they fill up their tanks; they are navigating a complex landscape of financial strain, digital transparency, and a radical shift in personal health priorities.

At ECRM’s Convenience Session, held last month in Destin, Fla., NIQ’s VP of Thought Leadership for Food & Beverage Chris Costagli led off the ECRM & retailmediaIQ Convenience Leadership Summit with a presentation that provided a sobering yet opportunistic view of the $193 billion convenience industry. 

While the channel’s numbers remain massive, with food service alone accounting for $19 billion, the traditional playbook is being challenged by consumers who are seeking healthier options while at the same time watching their wallets.

The Price Squeeze and the Death of the Impulse Buy

The most immediate challenge facing convenience retailers is the economic reality of their core shopper. Despite store counts increasing by 8% since 2005 and average store sizes growing, the last two years have seen consecutive declines in both dollar and unit sales.

The primary culprit? Price. According to Costagli, the convenience channel has seen prices rise at a faster rate than almost any other retail sector over the past year. This has led to a fundamental change in how consumers shop the channel. "Around 33% said that they're going to the convenience channel less today than they were a year ago," he says. "Fifty percent of them cite price as their main reason. It's more expensive to buy those products at a convenience retailer than it is to go someplace else.”

Perhaps more concerning for a channel built on the grab-and-go mentality is the decline of impulse purchases. Costagli revealed that 41% of consumers are actively avoiding convenience stores specifically to cut back on spending by removing temptation. When shoppers do visit, their baskets are larger in dollar value but smaller in volume – a direct result of inflation rather than increased demand.

The SNAP Household: A Critical and Vulnerable Anchor

One of the most impacted segments of convenience store shoppers are the Supplemental Nutrition Assistance Program (SNAP) households. With 42 million Americans on SNAP benefits and an annual purchasing power exceeding $245 billion, these shoppers are vital to the convenience ecosystem.

"The SNAP household actually spends more in convenience than a non-SNAP household does over the course of the year," Costagli says. "They’re spending less every time they come into the store, but they’re making a lot more trips.”

However, this critical demographic is under siege from two sides:

• Channel Shifting: Looking for maximum value, SNAP households are pulling back from grocery, drug, and convenience stores in favor of mass and club retailers.
• Legislative Waivers: A growing number of states are filing SNAP benefit waivers that restrict the purchase of "unhealthy" items like candy, soda, and energy drinks.

Costagli warned that these waivers create massive confusion at the point of sale. For example, some states may ban Snickers but allow Twix because the latter’s wheat flour content classifies it differently. Beyond the confusion, the financial risk is stark: if these waivers were expanded nationwide, the industry faces a worst-case scenario risk of $3.9 billion in lost candy sales alone.

The Wellness Consumer & The Need for Transparency

If economic pressure is the first hurdle, the second is a consumers’ increased obsession with wellness. Indeed, the informed consumer has evolved into the digitally verified consumer. Costagli highlighted the meteoric rise of free scanning apps like Yuka, which provide independent health scores for products. In May 2025, usage of these apps sat at 17% of the population; by January 2026, that number jumped to 25%.

"That number should be scary," Costagli says. "Among those consumers who are currently using the app, 27% trust the app more than the product's label. And the scariest number is that 87% say if you have a bad score, they will put you back on the shelf.”

For brands and retailers, this means the better-for-you trend isn't just a niche category – it’s fast becoming table stakes. After a brief dip during the height of inflation in 2022-2023, "better-for-you" products are once again growing at a faster rate than the rest of the store.

The GLP-1 Effect: Redefining the Basket

A significant driver of this health shift is the proliferation of GLP-1 medications (like Ozempic and Wegovy). As these treatments become more accessible, including newer, less expensive oral versions from compound pharmacies, they are fundamentally altering consumption patterns. GLP-1 users aren't just eating less; they are eating differently. Their demand for fiber, probiotics, and muscle health products is driving disproportionate growth in those categories.

"Consumption pattern changes for these consumers," Costagli notes. "At 270  days into treatment, meat snacks consumption is up almost 90%, whereas salty snacks continue to be negative.” 

Surprisingly, the GLP-1 trend is even impacting non-food categories. Costagli pointed out a 97% increase in household fragrance sales among GLP-1 users, likely due to changes in body chemistry and odor perception. Even candy and gum are seeing a "side-effect" boost as users seek to combat "Ozempic breath".

(See the ECRM blog post “GLP-1s and 'Omni Wellness' are Changing How We Shop for Vitamins & Supplements,” for more information on GLP-1s impact on how users shop.)

Searching for New Convenience Store Anchors

With cigarette smoking at a new low and alcohol consumption moderating (see ECRM’s blog post about the moderation trend), the convenience channel needs new reasons for consumers to walk through the door.

Costagli suggests looking for what her refers to as substitutable anchors. If tobacco trips are declining, retailers must capitalize on the items those shoppers used to buy during those trips.

• The Beverage Connection: 38% of tobacco trips include a soft drink, and 29% include an energy drink.
• The Pouch Pivot: While cigarette trips are down, trips for nicotine pouches (like Zyn) are up 74%.

The goal is to convert these shifting shoppers into high-margin food and beverage consumers before they decide to skip the trip entirely.

Turning Convenience Stores Into Destinations

To survive the next decade, convenience retailers must move beyond the “smokes and cokes” playbook of yesterday. The store of 2026 must be designed to be more of a destination. This means:

• Fresh Prepared Options: Moving beyond the roller grill to provide high-quality, specialty coffee and onsite meals that rival Quick Service Restaurants (QSRs).
• Credible Wellness: Curating an assortment that can pass the scan test with clean ingredients and functional benefits like fiber and protein.
• Value Strategy: Implementing private labels and incentives to meet the "price-squeezed" consumer where they are.

The rise of electric vehicles also provides a unique opportunity to rethink the store environment. Do you have an EV charging station?” asks Costagli. “Are you changing the way your store operates to bring those consumers in? If they are sitting in their car for the 20 minutes it takes to recharge, that’s a huge lost opportunity.”

The Path Forward for the Convenience Store Industry

All isn’t lost. The convenience channel still has the advantage of speed and multi-purpose shopping, but those advantages are no longer enough to overcome a weak product set or a lack of price transparency. 

The winners will be the retailers who stop viewing their customers as only vice product seekers and start seeing them as wellness-oriented, value-conscious individuals looking for a solution that fits their modern, hectic lives.

Watch my full interview with Chris Costagli in the video below!