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The economic landscape in 2025 is a real head-scratcher for a lot of folks, and that pressure on customers’ wallets is a huge deal. They are shopping differently, making different choices and if you aren’t paying attention, you could be losing out. For convenience store and gas station owners, this year is presenting some unique challenges; tariffs, and ongoing inflation are really squeezing margins and changing customer behavior in a big way. Knowing what your customers are dealing with financially is the first step to staying ahead.
The numbers don’t lie – retail sales growth is expected to slow to 2.7% to 3.7% in 2025, and your customers are feeling the pinch in ways that directly impact your bottom line. With PCE inflation staying around 2.5% in 2025, your regular customers are dealing with persistent cost pressures that haven’t gone away. The reality is that even though retail sales grew 3.6% in 2024, much of that growth got eaten up by higher prices rather than increased volume. This isn’t just about surviving another tough year, it’s about understanding that the customers walking through your doors are making different choices, and if you’re not adapting your strategy to meet them where they are financially, you’re missing opportunities that could define your success for years to come.
What’s Hitting Your Customers’ Wallets (and Your Business)
First off, let’s talk about tariffs because they’re hitting everyone’s bottom line. Products that used to be cheap are now more expensive. The National Retail Federation (NRF) says that overall retail growth is probably going to slow down to around 2.7% to 3.7% in 2025. That’s a bit of a dip from last year’s 3.6% and it’s because prices are going up faster than people’s paychecks are. Even big companies like Procter & Gamble are raising prices on a bunch of their products by 2.5%, so you’re seeing higher costs coming from every direction.
A couple of things to think about here: you got to be on top of your wholesale costs. Don’t get caught off guard by a sudden price increase from your supplier. Also, a smart move is to look at private-label brands or other, maybe lesser-known brands that give customers a more affordable option this makes it so they don’t feel forced to stop buying a certain product category altogether. It’s all about giving them choices.
Next up is inflation, and boy, it just won’t quit. Inflation is hanging around 2.5% which might sound manageable but customers feel it. They feel it at the pump and at the grocery store, and they feel it when they walk into your store. The NRF reported that personal income and spending grew by 4.5% but when inflation is eating up most of those gains, it doesn’t really feel like a win. You have to understand this is the mindset of the person walking through your door. So how about running promotions on stuff that’s considered an essential, like multi-buy deals or “stock up and save” promotions. Loyalty programs are also huge right now because they encourage repeat visits from your most price-sensitive customers, which is a great way to keep them coming back.
The three biggest economic forces hitting your business right now are persistent inflation, potential tariff impacts on wholesale costs, and changing consumer spending patterns that favor essentials over impulse purchases. Actually, speaking of challenges, did you know that food service has now overtaken cigarettes as the largest category in convenience stores? This shift represents both an opportunity and a pressure point as customers become more selective about discretionary spending.
Smart Moves You Should Make Right Now
Alright, so with all that in mind, what are some actual things you can do? Well, pricing is a great place to start. You don’t want to just lower prices across the board and lose profit, but you can use a layered pricing strategy. Offer a “good, better, best” option for your products. This way, if someone is on a tight budget, they still have an option that works for them. Also, when you do have a deal or a special price, make sure it’s super clear in your signage. Don’t make them guess the value.
Refreshing your product mix is another must do. Focus on the items that are essential and that move fast. Think about introducing more affordable alternatives, especially in categories like snacks, beverages, and maybe even household staples like paper towels or cleaning supplies. By having those choices, customers don’t have to go somewhere else to find what they need.
Another thought is to use your data. Your point-of-sale (POS) system isn’t just for ringing up sales. It’s a goldmine of information. Look at your sales trends to see what’s flying off the shelves and what’s gathering dust. Avoid overstocking premium items that might not sell in a tough economy. A sudden and random thought just came to me, my brother just got a new dog, a golden retriever puppy, and he’s been talking about all the training he has to do. Anyway, that’s not important, what is important is to use that data to manage your inventory turnover and keep your shelves stocked with things people actually want to buy. The NACS State of the Industry report in 2024 showed that in-store sales grew by 4.2% but keeping that momentum means you have to be smart with your product selection.
Turn a Challenge into an Opportunity
This tough economy isn’t just a problem, it’s also an opportunity. The businesses that adapt now and show they understand their customers’ struggles are the ones who are going to build a loyal following. When the economy eventually gets better, those customers will remember who was there for them and will stick around. By making small, smart adjustments to your pricing, your product mix, and your promotions, you won’t just survive this tough economic period; you’ll set your business up for long-term growth and success. It really is about being proactive and adjusting to what’s happening right now with your customers and their money.
