NACS Magazine July 2025

Advancing Convenience & Fuel Retailing

JULY 2025

BACKBAR EVOLUTION 4 ways to keep pace PRACTICAL AI Simple steps for implementation

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D O D O F WAR R O F afety s d foo tect e z i t i Prior s to pro m . syste usiness b your

convenience.org

Join store owners across the country who are fighting for fair tobacco policies.

Get Involved at TobaccoIssues.com

©2025

ONTENTS NACS / JULY 2025 FEATURES

28 The Backbar of the

Future Offers More Than Nicotine This article is brought to you by Kretek International.

Research shows that customers are focused on price and flavor as well as their to nicotine.

32 Know Your Customer Nearly a quarter of Americans work remotely—creating opportunities and challenges for retailers to capture this customer.

41 4 Ways to Adapt

and Attract Today’s Nicotine Shopper Change on the backbar is accelerating, with value and variety top of mind.

46 Build Your AI Toolbox Practical ideas for getting started or leveling up with AI.

62 Smoking Out the Illegal Vape Industry

54

How can convenience stores compete with vape shops when only one side plays by the rules?

Prioritizing Food Safety

Today’s hurdles are tomorrow’s opportunities for addressing traceability, implementing new technology and maintaining consumer trust.

STAY CONNECTED WITH NACS @nacsonline facebook.com/nacsonline instragram.com/nacs_online

Subscribe to NACS Daily—an indispensable “quick read” of industry headlines and legislative and regulatory news, along with knowledge and resources from NACS, delivered to your inbox every weekday. Subscribe at www.convenience.org/NACSdaily.

linkedin.com/company/nacs NACS JULY 2025 1

ONTENTS NACS / JULY 2025 IT’S A FACT

$3,875

The average sales per store, per month from commissary in 2024.

CATEGORY CLOSE-UP PAGE 76

DEPARTMENTS 6

From the Editor

8

Faces of the Industry

10 NACS News 20 Convenience Cares 22 Inside Washington Bills regarding the administration’s budget resolution work their way through Congress.

26 Ideas 2 Go 74 Gas Station Gourmet 76 Category Close-Up Commissary loses share of foodservice, but suppliers see opportunity ahead.

84 By the Numbers

PLEASE RECYCLE THIS MAGAZINE 2 JULY 2025 convenience.org

The presence of an article in our magazine should not be permitted to constitute an expression of the association’s view.

/ JULY 2025 EDITORIAL

NACS BOARD OF DIRECTORS

Jeff Lenard VP of NACS Media & Strategic Communications (703) 518-4272 jlenard@convenience.org

CHAIR: Brian Hannasch, Alimentation Couche-Tard Inc.

Ben Nussbaum Publisher & Editor-in-Chief (703) 518-4248 bnussbaum@convenience.org Leah Ash Editor/Writer lash@convenience.org Lauren Shanesy Editor/Writer lshanesy@convenience.org Noelle Riddle Editor/Writer nriddle@convenience.org Chrissy Blasinsky Digital & Content Strategist cblasinsky@convenience.org CONTRIBUTING WRITERS Terri Allan, Sarah Hamaker, Al Hebert, Steve Holtz, Emma Tainter, Melissa Vonder Haar

DESIGN Ji Ho Creative Director jho@convenience.org Erika Freber Art Director efreber@convenience.org David Marvin Graphic Designer dmarvin@convenience.org

ADVERTISING Stacey Dodge Advertising Director/ Southeast (703) 518-4211 sdodge@convenience.org Jennifer Nichols Leidich National Advertising Manager/Northeast (703) 518-4276 jleidich@convenience.org

COME TOGETHER. DO MORE. Join us at conveniencecares.org

Ted Asprooth National Sales Manager/ Midwest, West (703) 518-4277 tasprooth@convenience.org

PUBLISHING Nancy Pappas Marketing Director (703) 518-4290 npappas@convenience.org Logan Dion Digital Media and Ad Trafficker (703) 864-3600 ldion@convenience.org

TREASURER: Annie Gauthier, CFO/Co-CEO, St. Romain Oil Co. LLC OFFICERS: Chris Bambury, Bambury Inc.; Varish Goyal, Loop Neighborhood Markets; Lonnie McQuirter, 36 Lyn Refuel Station; Charles McIlvaine, Coen Markets Inc.; Tony Miller, Retail Delek US GENERAL COUNSEL: Doug Kantor, NACS MEMBERS: Lisa Blalock, BP North America Inc.; Tom Brennan, Casey’s; Andrew Clyde, Murphy USA; Brian Donaldson, Maxol Limited; Terry Gallagher, Gasamat Oil Corp./Smoker Friendly; Erin Graziosi, Robinson Oil Corporation; Raymond Huff, HJB Convenience Corp.

dba Russell’s; Mark Jordan, Refuel Operating Co.; Brian McCarthy, Blarney Castle Oil Co.; Natalie Morhaus, RaceTrac Inc.; Jigar Patel, Fastime; Robert Razowsky, Rmarts LLC; Stanley Reynolds, 7-Eleven Inc.; Kristin Seabrook, Global Partners LP; Travis Sheetz, Sheetz Inc.; Babir Sultan, Fav Trip; Doug Yawberry, Weigel’s Stores Inc.; Scott Zietlow, Kwik Trip Inc. PAST CHAIRS: Victor Paterno, Philippine Seven Corp.; Don Rhoads, The Convenience Group LLC. SUPPLIER BOARD REPRESENTATIVES: Vito Maurici, McLane Co. Inc.; Brian Morrow, Chobani & La Colombe

NACS SUPPLIER BOARD SUPPLIER BOARD CHAIR: Vito Maurici, McLane Co. Inc. CHAIR-ELECT: Bryan Morrow, Chobani & La Colombe VICE CHAIRS: Mike Gilroy, Mars Wrigley; Jim Hughes, GALLO; Kevin LeMoyne, The Coca-Cola Co. MEMBERS: Tony Battaglia; Ryan Calong, Pabst Brewing Co.; Jerry Cutler, InComm Payments; Jack Dickinson, Dover Fueling Solutions; Matt Domingo, Reynolds; Mark Falconi, Greenridge Naturals; Ramona Giderof, Diageo Beer; Danielle Holloway, Altria Group Distribution Co.; Kevin Kraft, Tropicana Brands; Jay Nelson,

Excel Tire Gauge LLC; Jordan Nicgorski, JUUL Labs; Nick Paich, TriggerPoint Media; Sarah Vilim, Keurig Dr Pepper; Derek Zahajko, CAF Inc. GENERAL COUNSEL: Doug Kantor, NACS STAFF LIAISON: Bob Hughes, NACS RETAIL BOARD REPRESENTATIVES: Tom Brennan, Casey’s; Scott Hartman, Rutter’s; Kevin Smartt, TXB PAST CHAIRS: David Charles, Cash Depot; Brent Cotten, The Hershey Co.; Kevin Farley

NACS Magazine (ISSN 1939-4780) is published monthly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscriptions are included in the dues paid by NACS member companies.

Subscriptions are also available to qualified recipients. The publisher reserves the right to limit the number of free subscriptions and to set related qualifications criteria.

Subscription requests: nacsmagazine@convenience.org POSTMASTER: Send address changes to NACS Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2025 by the National Association of Convenience Stores.

Periodicals postage paid at Alexandria VA and additional mailing offices.

1600 Duke Street, Alexandria, VA 22314-2792

Quality That Sells, A Legacy You Can Trust The heritage and craftsmanship of flue-cured tobacco finds a home in Wildhorse cigarettes, delivering quality, flavor, and value – a legacy that speaks for itself.

gopremier.com Premier Manufacturing, Inc. is owned by U.S. Tobacco Cooperative Inc. (USTC), a cooperative of proud American farmers who use the finest flue-cured tobacco in the U.S. to make high-quality, value-priced cigarette brands for adult consumers.

UP FRONT FROM THE EDITOR

Th e w o gettin rd is Our in g out. du the be stry has st food .

Spreading the Word

A Ben Nussbaum Editor-in-Chief

6 JULY 2025 convenience.org

t a recent sporting event, I overheard a conversation about chicken.

One person said something like, “It’s literally the best chicken I’ve ever had.” My interest was piqued.

A little later, I overheard another snippet of conversation: “We have to go there on the way back home.”

Then the kicker, a little later: “… and it’s at a gas station.”

At that point I invited myself into the conversation. I had to learn more. Turns out one person was an aficionado of Royal Farms chicken. Now a large group was making plans to visit a store.

Still: “And it’s at a gas station” was part of the dialogue. Not exactly in a negative way … but not in a positive way, either.

Stopping at a food-forward convenience store shouldn’t be novel—it should be a nobrainer. Great food co-located with a great assortment of beverages and snacks, clean bathrooms and fuel is always a win.

Food safety has to be part of the equation.

“Prioritizing Food Safety” in this issue looks at what the industry’s food safety leaders are doing to make sure that c-store food is safe—

a necessary prerequisite for foodservice sales to keep going up. The article shares insights from the 2025 NACS Food Safety Forum.

Learn more about the event at convenience. org/FSF. There are plenty of other great articles, too.

A few to point out: • We have a two-fer of nicotine content. “Up in Smoke” looks at the illicit vapor market while “4 Ways to Adapt to Attract Today’s Nicotine Shopper” is an overview of the most current trends on the backbar.

• “Build Your AI Toolbox” offers advice on leveling up your AI game.

• Our latest consumer survey tackles how remote, hybrid and commuter customers differ when it comes to foodservice, with some surprising results.

“It’s at a gas station.” In my mind, that’s a compliment—this is an incredible industry.

There’s no better place to celebrate c-stores and grow your business than at the NACS Show. Be sure to be there to mingle with 20,000+ of your closest friends. This year’s event is in Chicago, October 14-17.

NACSShow.com is the go-to spot to register and learn more.

UP FRONT FACES OF THE INDUSTRY

Celebrating the people who make our industry great.

Teaching and Training at TXB

T

he minute that Krystal Graham started working at TXB, “I felt like it was home. I knew I was at the right place,” she said.

She didn’t have any convenience store experience before joining the Spicewood, Texas-based retailer as a manager in training, but had been working in restaurants and other retail stores, including Walmart, since she was 16.

She’s now an area manager for TXB, overseeing nine stores and six delis, and has been with the company for four years. Krystal spoke with NACS about: Why she loves working in convenience I’ve learned that this job is about way more than what you would assume. It’s so interesting. We get to meet all kinds of people—ones who are traveling, as well as our regulars from the community who we get to know when they come in. They’re not just our guests, they’re as much our family as we are theirs.

It’s also very fast paced and it’s exciting. There are always new challenges every day and it’s a really fun environment to work in. I feel grateful to be part of the TXB family every day—they support my ideas, my goals and they believe in me. It’s been a blessing to me and my family, especially as a single mom of two kids.

This is the best job I’ve had.

8 JULY 2025 convenience.org

I spend most of my time in the stores serving as a resource for my teams. I not only learn from them but also help them with whatever tasks they have, challenges that they’re facing, or any struggles they have going on. I get to use that opportunity to help coach and develop our leaders. While I’m in those stores, I’m there for them, and when I’m not in the store, I am coming up with resources or helpful tools to make their jobs easier and benefit them, giving them knowledge they need to run their stores successfully.

At the end of the day when I lay my head down, that’s what makes me feel like I know I did the right thing by helping just one of them be successful.

Krystal Graham, area manager for TXB

What she finds most fulfilling about her job During my time as a store manager, I was blessed to help train some of the newly hired managers in training. I am passionate about training future managers and helping them grow to become the next store leaders of our company. I love being able to teach my team to be successful and grow.

What she would tell someone considering a job in convenience Convenience stores are an essential business and they have consistent demand. You’ll develop strong customer service skills, which are essential in any industry. For anyone that’s starting out, it’s a great entry into retail or foodservice and gives you experience that can open so many opportunities.

There’s lots of growth and advancement in convenience that you would never imagine.

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UP FRONT NACS NEWS

Register for the 2025 NACS Show It’s officially time to register for the convenience industry’s biggest global event, the NACS Show. The Show is headed to Chicago this year from October 14-17, with the Expo opening October 15.

Full conference registration includes access to all general sessions, education sessions, the Expo and the official NACS Show Kick-Off Party.

Industry members will learn from each other, discover the latest products and innovations, and gather information on top industry trends from a variety of education sessions.

Be sure to check out: • The Expo: Explore the Expo space with exhibitors across five categories: Facility Development & Store Operations; Food Equipment & Foodservice Programs; Fuel Equipment & Services; In-Store Merchandise; and Technology.

• The Cool New Products Room: This exclusive space showcases the latest products and innovations shaping

10 JULY 2025 convenience.org

the industry. The Preview Room is a must for anyone launching a new product into the convenience channel.

Buyer attendees can scan hundreds of new products to create their own shopping list for the Expo floor.

• The New Exhibitor Area: This section highlights the latest technology, products and companies entering the convenience store market with exhibitors that have never exhibited at a NACS Show before.

• Education Sessions: 50+ learning opportunities will ignite your competitive edge as you hear from leading industry peers. The robust lineup will address industry hot-button issues and give you the opportunity to expand your knowledge and develop expertise in the areas that matter the most to you.

Visit NACSshow.com to register now.

NACS Awards European Retailers for Excellence

Mariette Kristenson (third from left) received the NACS Convenience Industry Leader of the Year Europe Award at NACS Convenience Summit Europe, held this year in Copenhagen. Mark Wohltmann, Director NACS Global; Brian Donaldson, CEO of the Maxol Group and last year’s recipient; and Henry Armour, NACS CEO and President, presented the award.

During NACS Convenience Summit Europe, held May 26-28 in Copenhagen, Denmark, NACS recognized European retailers who showcased excellence and innovation in convenience retail with four awards.

Mariette Kristenson, CEO of Reitan Convenience Group, is this year’s recipient of the NACS Convenience Industry Leader of the Year Europe award.

“Mariette is highly respected and an influential leader in the global

convenience community. She is known for her strategic mindset, inclusive leadership and long-term value creation. Her industry achievements exemplify the spirit of the NACS Convenience Industry Leader of the Year award,” said NACS President and CEO Henry Armour.

Kristenson joined Reitan Convenience in 2006, holding several key leadership roles including CEO of Pressbyrån and 7-Eleven Sweden and CEO of Reitan Convenience Sweden (2012–2021).

Since 2021, she has been CEO of Reitan Convenience Group, overseeing operations across seven countries.

Under her leadership, Kristenson has positioned Reitan Convenience as a leading force in European convenience retail. She has led strategic and cultural transformation across Reitan Convenience and is a champion for values-based leadership, sustainability and digital innovation. She also has developed effective cross-market growth and collaboration models.

Reitan Convenience also received the 2025 NACS Convenience Retail Sustainability Award Europe. At Reitan Convenience, making life easier for customers also means making it more sustainable. Across its 1,700 stores in seven countries, the company has taken bold steps to reduce red meat in its food-to-go selection without compromising on taste or customer satisfaction, as well as incorporating other more sustainable food choices across its foodservice program.

In 2024, Reitan transformed its hot dog assortment, once dominated by beef and pork, and replaced its bestselling beef sausages with chickenbased options. The result was a success, with strong sales and positive customer feedback. Today, most of Reitan’s markets offer three hot dog varieties that contain red meat, and the remainder are chicken-based. This move has helped cut the company’s share of red meat in its food-to-go sales by 9 percentage points, bringing it closer to its climate targets and goals for healthier product ranges.

NACS JULY 2025 11

UP FRONT NACS NEWS

Avec Freiestrasse

Reitan Convenience

Circle K

12 JULY 2025 convenience.org

Avec Freiestrasse, an innovative convenience concept operated by Valora, won the 2025 NACS Convenience Retailer of the Year Europe award. The award recognizes the store’s innovative “The Kitchen” food concept and its digital transformation.

“The industry has seen impressive advancements in digital retail solutions, particularly with the growth of foodservice over the past two decades,” said Armour.

“Valora has shown an intelligent approach to combine manned and unmanned store operations while putting foodservice front and center to cater to a younger customer base that appreciates flexibility, locality and quality.”

Circle K is the winner of this year’s 2025 NACS Convenience Retail Technology Award Europe.

This recognition highlights Circle K’s commitment to leveraging innovative technology and effective practices to recruit, onboard and engage employees at scale across its European markets.

Circle K operates 5,200 stores across 12 European countries, hiring 8,000 to 10,000 employees in Europe annually. The competitive labor market in recent years made it challenging for the company to attract and retain new employees, leading to varied store performance, nearly 80% turnover, and many new hires leaving within 30 days.

To address these concerns, Circle K focused on streamlining the hiring process by using artificial intelligence for candidate evaluations, which led to a more efficient recruitment system that has processed over 230,000 applicants. Today, this system frees up valuable time for store managers to screen applications, and as the process evolves, predictive analytics will continue to optimize hiring practices and employee selection criteria.

Circle K also developed an immersive digital training program to enhance the onboarding process. This interactive, game-based platform combines digital learning with practical, hands-on experiences, ensuring every new hire gets a strong start.

Overall, these areas of digital transformation resulted in a 90% increase in job applications, a 24% improvement in employee readiness and a 13% reduction in turnover rates.

T H E

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UP FRONT NACS NEWS

TruAge Named De Facto Standard for Digital Age Verification TruAge, the innovative, universally accepted age-verification system that makes it easier to more accurately verify an adult customer’s age when purchasing age-restricted products, and its core-technology have been incorporated into the latest W3C Verified Credentials, Verifiable Credentials 2.0, that were introduced in May by the World Wide Web Consortium (W3C).

The new W3C Verified Credentials affirm that TruAge technology is the centralized standard for digital personhood, making TruAge the accepted standard for all applications that involve age verification.

“TruAge was developed to address strong consumer interest in using a trusted and reliable digital ID that combined consumer privacy and ease of use with the potential for mass retail integration—and it has delivered on that promise. It is very gratifying that W3C agrees with our vision and solution,” said Paul Ziv, TruAge’s vice president of technology and operations.

While Verifiable Credentials 2.0 was approved to improve the ease of expressing digital credentials, there also were several privacy-preserving goals that were important; both of these objectives are central to the core of TruAge. Developed by NACS and Conexxus, TruAge transforms the traditional carding experience at the checkout, delivering a better experience on both sides of the counter.

TruAge uses encrypted, one-time-use digital tokens to share only the most important elements to confirm the purchaser is of legal age—the driver’s license number, issuing state, expiration date and date of birth—which also minimizes human error from manual checks, protects the user’s privacy and makes identity theft difficult.

“TruAge is redefining how we manage age-restricted sales. It’s not just a smarter solution, it’s a more responsible solution. It blends compliance with convenience, speeding up checkouts while reducing business risk,” said Stephanie Sikorski, CEO of TruAge. “This monumental recognition by the W3C not only validates our vision and leadership but also firmly positions TruAge at the forefront of secure, privacy-preserving digital solutions. It’s credible recognition like this that is helping to change the narrative and reposition our

14 JULY 2025 convenience.org

industry as a global leader in the responsible sale of legal, age-restricted products and youth access prevention.”

Verifone was the first industry POS provider to integrate TruAge into its platform, and TruAge is now fully integrated with Verifone software versions 54.02 and higher.

Invenco by GVR has integrated TruAge into its current release of 24.04. This version will be live in the market via a handful of field trials before the software is released to retailers this summer.

To learn more about TruAge, contact Stephanie Sikorski at ssikorski@convenience.org or visit mytruage.org. You can find TruAge and see in-person demos this fall at the SIGMA Annual Conference, CFCA Annual Summit, and at the 2025 NACS Show’s Future of Convenience Booth in October.

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UP FRONT NACS NEWS

Member News RETAILERS Murphy USA’s board of directors appointed David C. Haley as an independent director of the company. Haley is president emeritus of HBK Capital Management, an investment management firm. He previously led HBK Capital Management’s high yield and distressed investing team for the United States and Europe.

Parkland Corporation appointed Michael Jennings as executive chair. In addition to providing continued leadership to the Board, Jennings will remain focused on the governance and delivery of a disciplined strategic review process which is being led by a Special Committee of experienced directors, supported by Goldman Sachs Canada and BofA Securities.

Smoker Friendly named Tom Allen as its new VP of operations. Allen joined Smoker Friendly as retail operations manager in 2016 and later became a region director for the company’s western business.

Alimentation Couche-Tard named Gary Brant as VP of North America foodservice and QSRs. Brant has held previous roles with Speedway and several operations leadership roles with Holiday Companies. Brant has been with Couche-Tard since the retailer acquired Holiday in 2017.

Kristin Seabrook joined Global Partners as its senior vice president of legal transformations, with plans for her to become its next chief legal officer. Seabrook will assume the role on January 1, 2026.

16 JULY 2025 convenience.org

Majors Management named Paul Titley as its new vice president of mergers and integration. Titley has been with the company since November 2023.

SUPPLIERS Rich Products (Rich’s) announced the hiring of Jaimie Lowe as its new executive vice president and chief financial Jaimie Lowe officer (CFO). As CFO, Lowe will oversee Rich’s financial strategy and planning, risk management, capital structure, and key growth initiatives.

Black Buffalo Inc. appointed Kellsi Booth as its chief legal officer. She joins the Black Buffalo executive team with over a Kellsi Booth decade of experience in heavily regulated industries, with a focus on nicotine and tobacco.

KUDOS

Chestnut Market

Chestnut Market was inducted into the Westchester Business Council Hall of Fame as the recipient of the 2025 Family

Business Success Award. This honor recognizes Chestnut Market’s enduring legacy of innovation, community impact and multigenerational family leadership.

“This award is a testament to the vision, dedication, and hard work of our founders and the countless team members who have made Chestnut Market what it is today,” said Faheem Jamal, director of c-store operations and a member of the second generation leading the business.

Parker’s Kitchen earned several awards “recognizing the company’s ongoing commitment Parker’s Kitchen to corporate philanthropy, food service technology and community impact,” the company said. Awards presented to the company included the 2025 Champion Award from goBeyondProfit, an award nominated and selected by Georgia business leaders; Gulfstream Community Involvement Award from Savannah Area Chamber of Commerce, honoring Parker’s Kitchen contributing more than $30 million to nonprofit organizations across Georgia and South Carolina; and the Business Impact Award in Richmond Hill, Georgia.

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UP FRONT NACS NEWS

New Members

NACS welcomes the following companies that joined the Association in April 2025. NACS membership is company-wide, so we encourage employees of member companies to create a username by visiting convenience.org/create-login. All members receive access to the NACS Online Membership directory and the latest industry news, information and resources. For more information about NACS membership, visit convenience.org/membership.

NACS HUNTER CLUB BRONZE PFSbrands Holts Summit, MO www.pfsbrands.com RETAILERS Aberdeen Pit Stop Aberdeen, SD Family Mart Co. Ltd. Tokyo, Japan www.family.co.jp/english Maggie’s Refuel Los Angeles, CA www.maggiesrefuel.com South Country Co-op Ltd. Medicine Hat, Alberta, Canada SUPPLIERS Altitude by Geotab Oakville, Ontario, Canada Aurus Inc. Norwood, MA www.aurusinc.com Blue Air FSE LLC Gardena, CA www.blueairinc.com Bowman Andros Mount Jackson, VA www.androsna.com Channel Fish Processing Braintree, MA www.channelfish.com Clip Money Anchorage, KY www.clipmoney.com

Global Growth Industries Fort Myers, FL www.globalgrowthindustries.com

Special-Lite Inc. Decatur, MI www.special-lite.com

Greenwich Strategy Bristol, RI

The PUR Company Inc. Toronto, Ontario, Canada www.thepurcompany.com

High Liner Foods Mississauga, Ontario, Canada www.highlinerfoods.com HighBridge Premium Medina, MN www.highbridgepremium.com Intelligent Clearing Network Inc. North Haven, CT www.icn-net.com

Water Lilies Food LLC Bay Shore, NY www.waterliliesfood.com

IPC Eagle Corporation Burnsville, MN www.ipceagle.com Jimmy’s Healthy Foods Elk Grove Village, IL www.jimmybars.com Mike Drops Miami, FL Nissin Foods USA Gardena, CA www.nissinfoods.com Noble Seltzer Tylertown, MS www.noblelabsms.com POSRG Wauconda, IL www.posrg.com Quantum Energy Square (C.H.E.F. Inc.) Santa Barbara, CA www.quantumsquares.com

DailyPay New York, NY

Riize UP Miami, FL www.riizestrips.com

EnergyPrint St. Paul, MN www.energyprint.com

Southern Glazers Wine and Spirits Dallas, TX

18 JULY 2025 convenience.org

Universal Candy USA Mount Kuring-gai, New South Wales, Australia www.zappousa.com

Calendar of Events 2025

AUGUST NACS Executive Leadership Program at Cornell August 03-07 | Dyson School, Cornell University Ithaca, New York OCTOBER NACS Show October 14-17 | McCormick Place Convention Center Chicago, Illinois NOVEMBER NACS Innovation Leadership Program at MIT November 02-07 | MIT Sloan School of Management Cambridge, Massachusetts For a full listing of events and information, visit www.convenience.org/events.

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CONVENIENCE CARES

Dash In Supports Local Communities Through Volunteerism The company offered employees the chance to clean up their local communities.

W

ills Group, the parent company of Dash In, celebrated National Volunteer Month in April by offering its employees volunteer opportunities. Employees were able to choose between a watershed cleanup day in Cape St. Claire, Maryland; a cleanup day in Richmond, Virginia’s Ancarrow’s Landing park; or a day spent clearing invasive plants at Lewis Park, in Newark, Delaware.

“We believe that it is essential to create ongoing community engagement opportunities that both help local organizations thrive and provide meaningful ways for our team to

20 JULY 2025 convenience.org

serve others; and one of the ways we achieve this is through employee volunteerism,” said Rayma Alexander, director of corporate communications and diversity, equity and inclusion.

“When we examined what employee volunteerism would look like for our community engagement program, we wanted to ensure that our teams felt supported and encouraged to participate,” she explained. The Wills Group offers every employee two full days of PTO to participate in community events and also hosts at least four annual volunteer events in support of the local community.

Since 2017, the company’s employees have logged more than 3,400 volunteer hours, with team member participation growing each year.

“We believe we’ve had high employee volunteer participation because team members actively participate in crafting our community engagement vision and this work aligns with their values,” Alexander said. “Team members can get involved as committee members that help organize volunteer events and build relationships with local organizations.”

In The Community Every year, the convenience retail industry dedicates billions of dollars to advancing the futures of individuals and families in our communities. The NACS Foundation unifies and builds on NACS members’ charitable efforts to amplify their work in communities across America and to share these powerful stories.

Learn more at www.conveniencecares.org.

1 WAWA PARTICIPATES IN

NATIONAL VOLUNTEER WEEK

Wawa celebrated The Wawa Foundation’s 11th anniversary and National Volunteer Week by giving back to its partners.

Wawa awarded $50,000 in Wawa gift cards to each of its community partners. The organizations that received gift cards donations were the American Red Cross Southeastern Pennsylvania, Breakthrough T1D Greater Delaware Valley Chapter, #CheckOutHunger, Children’s Miracle Network Hospitals, The Leukemia & Lymphoma Society Eastern Pennsylvania & Delaware Region, Special Olympics New Jersey and USO.

1

2 MIRABITO CARES DONATES $60,000 Mirabito Energy Products (parent company of Mirabito Convenience Stores) completed its March Mirabito Cares Round Up campaign, raising $60,000 “to support local food banks and help fight hunger in the communities we serve.”

Proceeds from the campaign benefited three local food banks: the Food Bank of Central New York, the Food Bank of the Southern Tier and the Regional Food Bank of Northeastern New York. Each organization received $20,000 each.

3 HOP SHOPS DONATES TO

JAVONTE WOODS FOUNDATION

Hop Shops convenience stores donated $27,000 to the Javonte Woods Foundation, which seeks to raise awareness of asthma and prevent death from asthma attacks.

This is the second year the company has donated to the foundation, bringing the company’s total donations to nearly $60,000. The Javonte Woods Foundation said it will use the funds to further its mission of providing education, resources and support to families affected by asthma and other respiratory conditions.

4 PILOT LAUNCHES NEW GIVING INITIATIVE Pilot launched its new corporate giving initiative, Miles of Good, which will focus on giving back to Pilot communities through giving and donations, volunteering and community partnerships. The initiative will focus on three key pillars: safety, education and veterans.

Last year, Pilot said it donated more than $5.5 million and is committed to growing this number in the years ahead.

5 ONCUE DONATES TO LOCAL FOOD BANK OnCue is partnering with the Regional Food Bank of Oklahoma, Our Daily Bread and other food pantries to minimize hunger and food waste. The company collects products from each store annually as it refreshes item selection. In 2024, OnCue collected $91,353.28 worth of non-perishable and personal care items, translating to 5,702 meals provided to local communities.

OnCue has previously donated food and personal care items during challenging times, including the Covid pandemic.

Since 2020, OnCue has given over $422,880 in products and $50,000 in monetary support to Oklahoma food resource centers.

2

5 4

3

NACS JULY 2025 21

INSIDE WASHINGTON

The Republican Trifecta: What It’s Done and Where It’s Going Bills regarding the administration’s budget resolution work their way through Congress.

BY JON TAETS

L

ast November, Republicans won a legislative trifecta in Washington, meaning they have the majority in both chambers of Congress and they hold the White House. What has this actually meant for the first few months of 2025, and what does it portend for the next 18 months? In reality, it’s meant a lot of intraparty spats and not a lot of truly consequential legislation becoming law.

That said, despite nearly historically narrow margins in both chambers, Republican leaders have been able to get some controversial legislation moved through the Capitol that many would have thought was unlikely to pass. The real first hurdle came on the very first day of the 119th Congress back in January with Speaker Mike Johnson’s (R-LA) own reelection to the office of Speaker of the House.

Johnson could only lose two Republican votes to maintain his hold on the gavel and was facing some disappointment from hardline conservatives due to having cooperated with Democrats 22 JULY 2025 convenience.org

to pass government funding legislation at the end of 2024. However, once the dust settled on the vote, with a not insignificant assist from President Trump, Johnson was able to prevail on the first ballot, despite many predicting another multiround affair of votes that day.

The Speaker, alongside new Senate Majority Leader John Thune (R-SD), have subsequently threaded two more high-stakes needles through passing a continuing resolution keeping the government funded through the end of September and a controversial budget resolution.

This resolution has set the stage for ongoing discussions and work to produce a massive reconciliation bill to pass tax cuts, defense spending increases and border security measures.

On the House side, Johnson, again with Trump’s support, was able to convince numerous right-wing members who have never supported a continuing resolution to do just that

Other debates rage on as well, including one which centers on spending in the Supplemental Nutritional Assistance Program (SNAP).

earlier this year. Continuing resolutions essentially continue existing funding levels passed by previous Congresses.

Following that vote, the two leaders were able to forge a compromise among their respective caucuses to pass a budget bill that has allowed work to begin in earnest on a large reconciliation package. The real heavy lifting on that will come when that legislation is prepared for floor votes.

At the time of the drafting of this article, that work is well underway.

Most attention has been on the House side thus far, as the House

narrowly passed the massive legislation, which extends much of the expiring provision of the 2017 tax law, provides additional border security and defense spending and makes significant changes to the SNAP and Medicaid programs.

The budget resolution required the House to come up with at least $2 trillion in cuts to allow the tax writers to create $4.5 trillion in tax cuts. Falling short of that number would require the Ways and Means Committee to lower its tax cut numbers. In the end, the cuts appear to have fallen below

that number and the tax cuts portion of the bill passed costs about $3.8 trillion, according to cost estimates. However, despite the lower number, Republicans were able to accomplish many of their goals in extending key small business and individual provisions.

Now that the bill moves to the Senate, how the House reached that lofty number remains the biggest challenge facing Republicans. The most controversial area of funding reductions has been around how to get significant reductions from the Medicaid program while trying not to cut actual benefits.

NACS JULY 2025 23

INSIDE WASHINGTON

Republican leadership insists that they can get hundreds of billions of dollars of savings from reforms to the programs without cutting benefits, but many remain very skeptical of that.

Cutting Medicaid benefits certainly has the potential to cost Republicans their majority in at least the House, which has many members in marginal seats very nervous. Finding a balance between what those members will support and the fiscal hawks who want the most spending cuts possible is likely the biggest challenge facing Republican leaders.

Other debates rage on as well, including one which centers on

spending in SNAP. Long a target of fiscal conservatives, some want to see major changes to that program as well but, like Medicaid, significant benefit cuts could imperil some members’ reelection prospects. Then there is the debate of how long to extend the tax cuts for and other very insidethe-beltway disagreements around processes, such as how to even account for all of these spending changes. These debates must be worked through before the legislation can be finalized.

The Senate’s goal is to move the bill through that chamber by July 4, but many have described that deadline as “aspirational” at best. The real deadline

is likely when the U.S. Treasury determines it can no longer stave off hitting the statutory debt limit. The legislation raises that limit by $4 trillion, so it must be passed before that time comes.

Current estimates put that at some time in mid-August. The NACS GR department will continue to advocate on your behalf and keep you informed as developments proceed.

Jon Taets is a NACS director of government relations. He can be reached at jtaets@ convenience.org.

NACSPAC Donors NACSPAC was created in 1979 by NACS as the entity through which the association can legally contribute funds to political candidates supportive of our industry’s issues. For more information about NACSPAC and how political action committees (PACs) work, go to www.convenience.org/nacspac.

NACSPAC donors who made contributions in May 2025 are: Dell Cromie Glassmere Fuel Service

Mohammad Khan Shahani inc.

Corey Paluch Moyle Petroleum Company

Karim Dhukani Easy Lane Stores

Henry Latifzadeh Callaway Oil Inc. dba Ultra-Fuel

Joe Sheetz Sheetz Inc.

Tony El-Nemr Nouria Energy Corp.

Andrew Martin Excel Tire Gauge LLC

Barrett Sims Pak-A-Sak Inc.

Ramona Giderof Diageo Beer Company USA

Brandon Mayer The Hershey Company

Tom Taunton Gurley’s Foods

24 JULY 2025 convenience.org

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IDEAS 2 GO

‘A Little Bit of Everything’ A Maine c-store stands out by offering first-to-market products.

BY SARAH HAMAKER

Name of company: Waterboro Market & Café Date founded: 2017 # of stores: 1 Website: www.waterboromarket.com

26 JULY 2025 convenience.org

W

aterboro Market & Café in East Waterboro, Maine, began life as a 900-square-foot store that gradually grew into the 6,300-square-foot location it is today.

David Pendleton, executive and facility manager for Town Line Deli Inc., which does business as Waterboro Market & Café, had worked for the previous owner for two years before purchasing the building and store with three other investors.

The original building had two businesses operating out of it, and “shortly after we purchased it in 2017, we took over the entire building when the other tenant left to bring our footprint to 1,800 square feet,” Pendleton said.

But even doubling the square footage wasn’t enough to bring Pendleton’s vision for a unique convenience store to life. “We owned the adjacent property too, and began the process of looking at numerous store layouts in and out of the state,” he said. He

BRIGHT IDEAS

took inspiration from major retailers and smaller regional ones, plus other mom-and-pop locations. The result is the current Waterboro Market & Café, which Pendleton strives to set apart with its unique offerings.

A STORE THAT STANDS OUT One of Pendleton’s goals is to be the first to have trendy items, like new drink flavors and snacks.

“We aim to be like a mini-version of Buc-ee’s with your not-typical convenience store items,” Pendleton said. “We dabble in a little bit of everything because we’ve got the square footage to do that.”

For example, Waterboro Market was the first in the area to stock freezedried candy. The store also tries to do as much business with local companies as possible. It stocks handmade bags from local crafters and Wicked Joe and Benbows Coffee that come from two Maine businesses. “Plus, if a customer asks for [something], we try to bring it in for them,” he said.

Waterboro Market’s flavor station lets shoppers customize their energy drinks with syrups; recipes are written on the wall behind the syrups.

On the foodservice side, Nana’s Kitchen turns out fried chicken and other comfort foods, such as shepherd’s pie and chop suey, which are available in the hot and cold grab-and-go cases. In addition to the homemade comfort meals, the store has its own pizzas and subs.

A beer cave stocks a wide variety of options, including around 50 SKUs from 15 local breweries. Kombuchas, craft sodas and CBD-infused drinks round out the beverage selection.

One unique area of the store is an energy bar, where customers can add flavorings to Red Bull.

IT’S THE PEOPLE It’s not surprising that Pendleton ended up with his own convenience store, given his background—his grandmother owned a restaurant, he previously worked for Irving Oil and he co-owned a single convenience store several decades ago. In between those jobs, he worked in other sectors, but he kept coming back to the convenience store industry.

“It’s the customers that pulled me back,” Pendleton said. “When you do it right, you develop a loyal following. It’s that one-on-one connection I treasure.”

With its location near a lake, campground and dirt bike track, Waterboro Market gets customers from a wide geographic area. “We might see some only once or twice a year, but we remember them and they remember us, and always stop by when they’re in town,” he said.

Pendleton said his core group of employees are the linchpin of the store.

“Most of them have been with us since the inception or very close to it,” he said. “They give us 110% and we give them 110%. They know management, including myself, aren’t afraid to jump in and help.”

For David Pendleton, limited time offers (LTOs) are the key to merchandise success. Waterboro Market runs LTOs for at least six months, then evaluates how the item did.

Sometimes, he will add an LTO for a particular season, such as lobster rolls during the summer.

“I love LTOs because they don’t have to be part of your menu for a long time but they can create opportunities to test products,” he said.

“LTOs draw attention to your store and make you stand out from your competitors.”

It’s that hands-on attitude that has made workers stick around, he said.

“Our employee retention is great. Even our seasonal workers who started out working for us in high school often come back during the summers from college.”

He taps long-time employees to train the newcomers. “We do up to 40 hours of training per employee, depending on how quickly the new workers catch on,” Pendleton said. “Plus, all of our employees are cross-trained in all positions because we don’t want anyone to say, ‘That’s not my job.’”

Pendleton hopes customers leave Waterboro Market & Café with an overall good impression of how courteous the employees are. “We want them to stop in here and get everything they need, from fueling up their car to fueling up their body,” he said.

Sarah Hamaker is a freelance writer, NACS Magazine contributor and award-winning romantic suspense author based in Fairfax, Virginia. Visit her online at sarahhamakerfiction.com.

NACS Ideas 2 Go showcases how retailers today are operating the convenience store of tomorrow.

To see videos of the c-stores we profiled in 2024 and earlier, go to www.convenience.org/Ideas2Go. NACS JULY 2025 27

The Backbar of the Future Offers More Than

NICOTINE

Research shows that customers are focused on price and flavor as well as their nicotine.

28 JULY 2025 convenience.org

S

ince 1983, Kretek International Inc. has been providing tobacco products and accessories that deliver a profitable market basket to its trade partners.

Albert Jose is Kretek’s senior VP of marketing and sales, a position he’s held for the past five years. During his tenure, he’s helped navigate Kretek’s commitment to nicotine-free smokes for the U.S. market, the growth of the Cuban Rounds premium cigar brand and the relaunch of Clipper lighters. Through it all, he’s kept a firm focus on Kretek’s trade partnerships and the innovation it takes to grow. According to Jose, the quality and uniqueness of Kretek brands has kept pace with constantly

shifting preferences and regulations and will be integral to building the trial, adoption and loyalty it takes to thrive.

The tobacco backbar is shrinking by $2 billion a year. What’s Kretek’s approach moving forward?

Backbar sales volume may be shrinking, but the number and variety of SKUs has doubled. Right now, most tobacco product innovations are SKUs that aren’t tobacco— they’re new products that are mainly driven by discreet use, health concerns and price.

As these products continue to emerge on the backbar, consumer preferences are changing to both tobacco and tobacco-free

This interview is brought to you by Kretek International.

products. Researchers actually invented the term polyusers so the migration from cigarettes to nicotine alternatives would make sense.

For quite a few years, tobacco regulation has been an on-again, off-again effort. How is Kretek dealing with this?

We’ve moved much of our business outside of FDA rulemaking. We’ve coupled our Cuban Rounds imported premium cigars with Djarum filtered cigars, and added nicotine-free botanical filtered smokes, refillable, reusable lighters and non-tobacco wraps and cones.

Administrations change—our goal is to Smokeless be ready with products that can be part of a smoker’s market basket when the FDA redraws their rulemaking and as more states SNUS impose their own bans.

A main reason for Kretek’s nicotine-free products is to offer enjoyable, legal alternaPouchSKUs. Flavor and menthol tivesNic to banned bans in California and Massachusetts offer trial markets for flavored nicotine-free prodCigars ucts while things get settled at the federal level. Smokers in banned markets told us

pretty strongly that they felt the products they enjoyed were unfairly taken away.

Why tobacco-free smokes instead of oral nicotine or some other direction?

Nicotine-free smokes are an enjoyable, legal transition for adult smokers who want to lose the burden of addiction. A surprising result of our research was that more than half of adult smokers ranked flavors and menthol as far more important than nicotine and tobacco.

The majors chose oral nicotine because it offers the sustainable transition from cigarettes they need to deliver shareholder value. Our nicotine-free Splash reflects a measurable percentage of menthol smokers who told us they’d try it if their brand was removed from the backbar.

Albert Jose, senior VP of marketing and sales, Kretek

Source: Independent 2024 survey of 600 menthol smokers

How does Kretek look at future needs for the convenience marketplace?

We do a lot of research to understand which consumers are embracing change and deliver what they tell us they’re looking for.

Today, the shape of innovation is a nicotine pouch. In 2024, pouches passed $4 billion.

It’s already passed $5 billion this year and is

Vape 0% 5% 10% 15% 20% 25% 30% CONSUMERS USING NICOTINE POUCHES (INCLUDING PROJECTIONS)

Our constant goal is to Sources: Nielsen IQ 52 weeks ending May offer a better NIH 2023 Tracking Study (Adjusted for NI consumer experience and help our retail partners bring it to market.

12% 10% 8%

Through mid-2025, 6.3% of current smokers have migrated or switched to nicotine pouches.

6% 4% 2% 0%

2022

2023

2024

2025

2026

NACS JULY 2025 29

Administrations change—our goal is to be ready with products that can be part of a smoker’s market basket when the FDA redraws their rulemaking and more states impose their own bans.

projected to be over $40 billion by 2033—we’ll have to wait and see if that comes true.

The most pressing task is sorting through the demand for new ideas. Another growing challenge is managing the variety of expectations of each customer who walks through the door.

Oral nicotine is a good example. Over the past five years, almost seven million smokers have quit. During the same period, more than eight million have adopted vape and oral nicotine.

Change is a moving target: The category tomorrow will be different from today. Kretek’s game plan, if you will, is to look where we believe changes will happen and why. A good quarterback doesn’t throw to the receiver—he throws to where the receiver is going to be.

We will continue to be watchful over the next few years. The FDA still sees addiction as a major health issue and will zero in on it at some point. How many polyusers are now choosing 6 mg or 9 mg pouches? How many will discover how good a menthol smoke tastes, even without the nicotine?

line with eclectic, educated, young consumers. Kretek’s early focus was on local distributors, local tobacco shops and local alternative retailers. C-stores found us and saw the spontaneous loyalty of these distinctive smokers.

How did Kretek get to where it is today?

First and foremost, Kretek has always worked at being a great partner. We’re still a family business, similar to many of our distributors.

Our constant goal is to offer a better consumer experience and help our retail partners bring it to market.

We brought Djarum to the United States 42 years ago as an outlier product

Aren’t you really just providing an alternative form of cigarettes?

We avoid the word “cigarettes” because Djarum Bliss and Splash both fall well outside that legal definition. Cigarettes are made from tobacco. Bliss and Splash are clearly labeled non-tobacco and nicotine-free. Just the absence of nicotine gives smokers more personal control over how often they light up.

How have you maintained your presence in the face of larger competitors?

We explore new product ideas whenever we see a trend on the horizon. We expanded Cuban Rounds premium cigars into c-stores several years ago because there was nothing like it in terms of cigar satisfaction, value and margins for retailers. Now it’s the No. 1 premium cigar in c-stores for the third year in a row.

In 2024, we became Clipper Lighters’ U.S. partner. Clipper’s unique product appeal extends to the alternative market, and their broad range of torches, grill lighters and hardware, could be just right for a c-store mini-hardware section.

PERCENTAGE OF MENTHOL CONSUMERS WHO ARE POLYUSERS

Smokeless

Source survey

SNUS

Nic Pouch

Cigars

Vape 0%

30 JULY 2025 convenience.org

12%

5%

10%

15%

20%

25%

30%

When Convenience Matters, Kretek Delivers Every Time Contact your Kretek representative today for details Email: KretekSales@kretek.com Call: 1-800-358-8100 Online: Kretek.com

Know Your HYBRID REMOTE COMMU Customer

32 JULY 2025 convenience.org

BY JEFF LENARD AND ADAM ROSENBLATT

TER A

ccording to the U.S. Bureau of Labor Statistics, 21.6% of the workforce works remotely. That group is about evenly split between people who exclusively work remotely and those on a hybrid schedule. A new NACS consumer survey reveals some distinct shopping and eating patterns that have emerged to differentiate full-time commuters from those who work fully remotely or have a hybrid work schedule, creating opportunities and challenges for retailers.

NACS JULY 2025 33

Their Feelings About the Big Picture

13%

of hybrid/remote workers eat more than three meals a day

Five and a half years after Covid caused mass changes in the United States, 57% of daily commuters say that their daily life has “gone back to normal,” which is 5 percentage points higher than the national average (52%).

When it comes to worries over their finances, daily commuters are significantly more likely to say they’re worried about money “all the time” (37%) versus just 27% for those who are not daily commuters.

HOW THEY EAT MATTERS “The hybrid work model is here to stay,” noted Denton Cinquegrana at the April 2025 NACS State of the Industry Summit.

There is pretty close alignment when it comes to how many meals a day commuters and hybrid/remote workers consume; on average 46% of consumers eat two meals a day and 31% eat three meals a day. The one big difference: hybrid/remote workers are much more likely to say they eat more than three meals a day compared to daily commuters (13% versus 4%).

This difference is explainable when you consider the work-from-home crowd probably has easier access to their own kitchens.

There are also some differences when it comes to which meals they consider to be their main meal. Dinner is the main meal for most Americans, regardless of their commuting situation, but commuters are more likely than the general population to say breakfast is their main meal, while hybrid/remote workers are more likely to say lunch is their main meal.

On a typical weekday, about one in 10 daily commuters eats breakfast outside the home, and about half eat lunch out. One in 10 eat dinner out, whether by themselves or as a family.

Meanwhile, hybrid/remote workers are about half as likely to eat breakfast and lunch outside the home compared to commuters, but they are more likely to go out for dinner.

WEEKDAY MEALS EATEN OUTSIDE THE HOME

48%

Commuter Remote/Hybrid

29%

18%

WHICH MEAL DO YOU CONSIDER YOUR MAIN MEAL? Commuters

Hybrid/remote

Breakfast

22%

15%

Lunch

22%

30%

Dinner

56%

54%

34 JULY 2025 convenience.org

11%

9% 5%

Breakfast

Lunch

DInner

While people are often creatures of habit, we do see that daily commuters are much more likely to vary their eating patterns. This presents a great opportunity to entice these constant commuters with new offerings, products or services.

About the Survey

MY EATING HABITS ARE …

Commuter Hybrid/Remote Mostly the same 62%

68%

Often varied

32%

38%

Along those same lines, we find that daily commuters also are more likely to “try new or different things” when shopping for food or drinks at a convenience store.

WHEN SHOPPING AT A C-STORE, I USUALLY Commuter

Hybrid/Remote

62%

65%

Often try new or different things 38%

35%

Mostly buy the same things

31%

of commuters purchase items every day at a c-store

NACS has conducted consumer surveys since 2007 to learn about specific areas of interest to convenience retailers. This survey was conducted by national public opinion research firm Bold Decision (bold-decision.com). A total of 606 convenience store customers (i.e., consumers) were surveyed in December 2024, with a focused drilldown on the 65% who were employed fulltime or part-time. Among this group, more than two-thirds (68%) “commute to work every day” while the remaining 32% either commute “a few times a week” (16%), “less than once a week” (3%), or do not have a commute and “work remotely / exclusively from home” (13%).

A potential big opportunity for retailers, echoing a theme from the 2025 NACS State of the Industry Summit, is to offer—and communicate—a betterfor-you offer.

Most daily commuters say that they probably aren’t eating as well as they should. By contrast, those without a daily commute are mostly pleased with their eating habits. These findings reveal an actionable gap that stores can seize. Because daily commuters already eat out more often, retailers can draw in these customers with better-for-you offers that may resonate with customers.

IF YOU HAD TO CHOOSE, WHICH STATEMENT COMES CLOSEST TO YOUR VIEW? Commuter

Hybrid/Remote

Most days I eat about what I should

45%

52%

Most days I should probably be eating healthier

55%

48%

NACS JULY 2025 35

WHAT TIMES DO PEOPLE EAT MEALS?

Hybrid/remote workers are twice as likely as commuters to eat more than one meal a day outside the home. As much as they might enjoy the convenience of working from home, they still want to get out and interact with people.

36 JULY 2025 convenience.org

Interestingly, hybrid/remote workers are twice as likely as commuters to eat more than one meal a day outside the home. As much as they might enjoy the convenience of working from home, they still want to get out and interact with people—and perhaps grab some food.

For convenience retailers, there could be an opportunity to highlight these meal occasions—which may not be traditional sit-down meals but snacking occasions that act like meals.

HOW MANY TIMES DO YOU EAT OUT? Commuter Hybrid/Remote More than once a day Once a day More than once a week Once a week or less

5% 12%

10% 9%

30%

28%

46%

43%

After 1am

12am-1am

11pm-12am

9pm-10pm

Work From Home Weekend Dinner

8pm-9pm

7pm-8pm

6pm-7pm

Work From Home Weekend Lunch

5pm-6pm

4pm-5pm

3pm-4pm

2pm-3pm

Work From Home Weekend Breakfast

1pm-2pm

12pm-1pm

11am-12pm

Commuter Weekend Dinner

10am-11am

9am-10am

8am-9am

Commuter Weekend Lunch

7am-8am

6am-7am

5am-6am

Before 5am

Commuter Weekend Breakfast

92%

of all workers buy gas at least once a week There are some significant differences in times that workers eat meals.

• For breakfast, commuters are much more likely to eat earlier in the day. The majority of commuters eat breakfast a full two hours before those who are hybrid or remote.

• For lunch, both sets of workers are most likely to eat between 12:00 noon and 1:00 p.m. The biggest difference is that hybrid/ remote workers are more likely to extend the lunch time hour to either before and after that one-hour peak period.

• For dinner, hybrid/remote workers eat between 5:00 p.m. and 6:00 p.m., while commuters have a more delayed dinner time.

Jeff Lenard is the vice president of NACS media and strategic communications. He can be reached at jlenard@convenience.org.

Adam Rosenblatt is the founding partner of Bold Decision and has been leading NACS consumer surveys since 2009. He can be reached at adam@bold-decision.com.

OVERALL C-STORE TRIPS ARE SIMILAR BETWEEN THE GROUPS As it relates to convenience stores, food/meal/drink purchase habits do not vary significantly when it comes to hybrid/remote versus commuter.

OPPORTUNITIES FOR RETAILERS While more businesses are ramping up return-to-work mandates, it seems likely that flexibility will be a big part of the shift in work requirements post-Covid. Some sort of hybrid work environment—such as working one day a week remotely—seems to be the norm for many office workers.

Our research shows that remote workers want to get out of the house, and that presents some opportunities for convenience retailers. The challenge is to align your offer with their schedules.

According to office occupancy experts, Tuesdays, Wednesdays and Thursdays are the days when the highest percentage of workers are in the office. For those days, retailers may want to continue with a traditional commuting offer.

But what about Mondays and Fridays? There could be opportunities to customize an offer that appeals more to remote workers, with one big caveat: There is a big difference in mindsets between the beginning of the week and end of the week. We’ll explore some of those key differences in future consumer research.

HOW MANY TIMES DO YOU PURCHASE FOOD OR DRINK FROM A C-STORE AS PART OF A MEAL? Commuters More than once a day Once a day More than once a week Once a week or less Not at all

Hybrid/Remote

10% 11% 14% 14% 29% 27% 29% 26% 19% 21%

There is also relatively little variation when it comes to what initially brings customers to a convenience store. It’s no surprise to see that the main reason is to buy gas, though daily commuters are slightly more inclined to be come in to purchase a beverage.

WHAT WAS THE MAIN REASON FOR YOUR LAST TRIP TO A C-STORE?

Buy gas Buy food/meal/snack Buy a beverage Use the bathroom/ATM

Commuter

Hybrid/remote

47% 21% 26% 3%

48% 21% 23% 6%

NACS JULY 2025 37

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Change on the backbar is accelerating, with value and variety top of mind.

TO ADAPT TO ATTRACT TODAY’S NICOTINE SHOPPER

T

he nicotine category of today looks different than it did 20 years ago, 10 years ago or even five years ago. Perhaps nobody knows that more than those working for companies founded in the 1800s.

Swisher, founded in 1861, witnessed the transition from cigars and pipe and chewing tobacco to cigarettes towards the end of the 19th century. It also saw the decline in cigarettes in the 1980s that led to a surge in smokeless tobacco and now the rise of e-cigarettes and other smoke-free alternatives.

“In the past five years or so, the tobacco industry started … an evolution to tobacco alternatives such as nicotine pouches and vaping devices,” said Greg Schmidt, Swisher’s vice president of business analytics.

Philip Morris International (PMI) is another example, having started in the tobacco business in 1847 and recently acquiring Swedish Match and its popular Zyn brand.

“There has been a shift in nicotine consumer behavior to move to better products, such as from loose leaf or moist snuff to oral nicotine pouches, for a host of reasons, including ritual, satisfaction, convenience and others,” said Sam Dashiell, regulatory communications senior specialist for PMI U.S.

NACS JULY 2025 41

Retailers and suppliers are serving very different nicotine shoppers than those of yesteryear, as discussed by Andrew Baill, Wawa’s senior manager of customer insights and strategy, during this year’s NACS State of the Industry (SOI) Summit.

“When you think about the transition we’re seeing from cigarettes to OTP, there’s also a shopper transition,” Baill said. “We’re seeing [it move] from older to younger; there’s a lot of change.”

In looking at the evolution of the nicotine shopper last year, experts agreed on a few things.

Specifically, that today’s nicotine shopper is: • Less likely to smoke cigarettes than the historic nicotine consumer • Using multiple products based on occasion • Less brand loyal and more price savvy • Open to (and even demanding) innovation • Still very important for convenience Here are four ways in which retailers can evolve alongside their evolving customer.

Promote the Relationship Between Cigarettes and OTP

It’s no secret that today’s nicotine shopper is less likely to smoke cigarettes: The most recent NACS CSX Convenience Benchmarking data shows cigarettes went from 30.9% of in-store sales in 2015 to 18.8% in 2024. Bonnie Herzog, managing director and senior consumer analyst at Goldman Sachs, noted that cigarette declines accelerated at sequentially higher rates in Q1 2025, with volumes down 7% versus down 6.8% in Q4 of 2024.

On the other side of the backbar equation, OTP has experienced steady growth. That same NACS CSX Convenience Benchmarking data had OTP as contributing 7.6% of in-store sales in 2024 and accounting for 5.8% of in-store margins—very close to the 6.6% of margins from cigarettes.

“Technology has led to new, innovative nicotine products that are better choices than continuing to smoke or use other traditional tobacco products,” said Dashiell. “Nicotine consumers continue to move to these alternatives as demonstrated by smoking rates declining to all-time lows.”

But something else stood out in the benchmarking data presented at SOI. “One of the most interesting things here is when you look at the basket of what people are buying when they buy OTP,” Baill said, noting that it wasn’t surprising that candy and packaged beverages were two of the three most-purchased categories with OTP. What was a surprise was the other most-purchased category with OTP: cigarettes. That result highlights “that the polyuser in these nicotine categories is really important. There’s a lot of folks who are buying [both] cigarettes and OTP, even in the same trip.”

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To better reach those polyusers, it would be great to understand which OTP options are more frequently purchased with cigarettes—or each other. The problem, of course, is that no one tobacco shopper is exactly alike.

“Every consumer is different, so what might work for one may not work for another,” said Dashiell. “We see poly- and solo-usage change as consumers move from one category to another.”

“These consumers are seeking variety for various reasons, such as different use occasions, and/or price differentials across various product forms,” added Schmidt. “There are a variety of tobacco/nicotine segments being purchased within adult consumers’ product repertoire.”

Some examples Schmidt provided included cigarette consumers opting for e-cigarette or vapor products during certain social situations while moist smokeless consumers may prefer modern oral offerings.

Though newer offerings are showing tremendous growth—Nielsen data reflects double digit increases for the modern oral segment over the past five years—it’s important to remember the scale and whole of the backbar experience.

“While year-over-year growth suggests a bright future for these products, the sales are still dwarfed by cigarettes, which have more than 12 times the sales of smokeless tobacco alternatives,’ said Jason Zelinski, vice president of North American retail for NielsenIQ (NIQ).

“This is a really important consumer. Even though you could look and say, ‘Hey, cigarettes are declining,’ it’s important to think of these categories in concert together,” said Baill.

Call Out Value to Attract Economically Squeezed Shoppers

Historically, declining cigarette volumes have been offset by price increases. But the most recent Nicotine Nuggets tobacco retailer and wholesaler survey conducted

by Goldman Sachs suggested that a combination of inflation and a continued economic squeeze on price-strapped consumers may mark a breaking point.

“Overwhelmingly, retailers continued to suggest that manufacturers are nearing a ‘wall’ on the price increases as evident in price gaps,” Herzog wrote in a research note. Herzog added that price gaps between premium cigarettes and the lowest tier cigarettes have hit 49% (compared to a historical average of 30%), which is driving downtrading to lesscostly options.

Even with all the evolution, the nicotine shopper continues to skew towards lower income brackets. NIQ pegs 56.1% of cigarette shoppers as earning under $50,000 a year and the other segments don’t fare much better: 44.9% of smokeless shoppers (including modern oral) earn less than $50,000 annually, followed by 54.7% of vapor shoppers and 62.4% of cigar shoppers. And every segment over-indexes in shoppers earning under $10,000 a year.

Retailers are seeing this play out in their stores.

“One retailer noted that the consumer is feeling the financial pressure, and this is particularly true at the low end,” Herzog wrote. She further highlighted that the major tobacco companies continue to take price increases to balance out the loss of unit volume.

This is where other product types—not just deep discount cigarettes—are standing out, whether because of lower tax rates, promotional activity or even just perceived value.

“We have witnessed adult consumers becoming more dialed in on product variety, driven in part by pricing dynamics, as well as the breadth of tobacco alternatives available in the marketplace,” Schmidt said.

The Nicotine Nuggets survey reported that retailers are seeing alternative products benefit most from downtrading: 28% reported shoppers switching to pouches because of costs (up from 19% in Q4 2024) and 26% reported volumes going to e-cigs (down slightly from Q4 2024).

“Several retailers highlighted that consumers are moving to nicotine pouches, which is becoming the best value on the back wall,” Herzog added.

By calling out a promotion, a price or even a perceived value like nicotine strength or puff count, retailers can better communicate value to a consumer who is demanding it.

“Customers who purchase vapor products have shifted to higher puff counts, increasing per-transaction size while reducing overall trips.”

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With Trips Declining, Focus on Building Baskets

Trips are down and it’s not getting better. The Nicotine Nuggets survey had 73% of its respondents reporting convenience trips for tobacco or nicotine products were lower in Q1 2025 vs. Q4 2024, including 8% who said trips were “much lower.” By comparison, 58% of respondents said trips were down in the Q4 2024 survey.

“Basket size (was) modestly up, buoyed by inflation, but trips (are) down—a key concern for retailers,” wrote Herzog. “Our survey respondents have grown significantly more cautious about the health of the adult tobacco/nicotine consumer, with 53% indicating a more negative outlook, up sharply from our Q4 survey when only 26% indicated a weaker view.”

While trips being down is not unique to the tobacco category, what is unique is a potential reason: that people have exited the category entirely. That makes the data a little different than what we’re seeing across all of convenience.

“Even as the number of buyers declines, the remaining buyers are increasing or maintaining the number of purchases each year,” said Zelinski of NIQ, adding that some categories are also seeing an increase. “In our most recent data, we have been tracking frequency of purchase increasing in vape.”

Anecdotally, retailers have also reported that while trips are down, the amount spent per trip is up—especially in certain categories.

“One retailer noted that customers who purchase vapor products have shifted to higher puff counts, increasing per transaction size while reducing overall trips,” Herzog wrote. “Another retailer noted he’s seeing less traffic overall but slightly more spend per trip.”

Though data from NACS Convenience Voices presented at SOI shows that both the cigarette and OTP shopper are still more likely to shop daily (or more than once a day) than shoppers in other categories, a focus on basket size over trip frequency will help protect retailers should the declining trips phenomenon continue.

“It’s important to think of cigarettes and OTP as in concert together.”

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“We see poly- and solo-usage change as consumers move from one category to another.”

Reflect Today’s Nicotine Shopper With Your Backbar Mix

Between economic pressures, regulations, social pressures and innovation, there are lots of reasons the nicotine shopper has evolved.

“There’s no question that regulations, flavor bans and economic pressures have indeed driven a shift in the tobacco/nicotine landscape,” Schmidt said.

“However, innovation in OTP products and blend varieties appeal to adult consumers who can tailor their product choice to a particular preference or use occasion.”

“Smoke-free products are a fast-growing part of the marketplace as more and more consumers of cigarettes and traditional tobacco products are switching to these better alternatives,” agreed Dashiell from PMI. “Retailers should meet and encourage this behavioral change.”

And, according to the Goldman Sachs survey, many retailers are: Herzog wrote that, when it comes to space allocation, “Oral nicotine is expected to be the biggest beneficiary in 2025.”

But it’s not just a matter of highlighting the newest and most exciting products. Success means keeping that polyuser, the still massive size of the cigarette category and the price-sensitivity of this particular shopper in mind and striking the right balance for today’s consumer.

“Convenience continues to play a vital role for today’s tobacco and nicotine category since it fits quite nicely with our busy, on-the-go lives,” said Schmidt. “C-stores enable adult consumers to cross off a few items in one fell swoop, such as filling up their gas tanks, grabbing a cup of coffee, purchasing their nicotine products and other categories. Stores that embrace a well-positioned backbar offering of the latest products set themselves up for continued success.”

Melissa Vonder Haar is the marketing director for iSEE Store Innovations. Follow her on X at @ iSeeMelissaV.

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AI

BUILD YOUR

Practical ideas to tighten the nuts and bolts of your AI strategy.

BY LAUREN SHANESY

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B

abir Sultan, owner of five Fav Trip stores in the Kansas City, Missouri, area, recently had a publication call his stores a “playground for AI.” In addition to running convenience stores, Sultan is the co-owner of a development company working on AI features relevant to the retail industry.

When approaching AI, his goal is always to ensure that it’s a solution to a problem, something that makes “the shopping experience and the store owner’s life easier, better and allows them to make better decisions by using AI,” he said.

AI experts and vendors emphasize that AI should support your business strategy, not the other way around. “Eighty percent of AI projects fail, and only 30% [of those that succeed] hit their ROI objectives,” said Greg Buzek, founder, president and principal analyst of IHL Group, a global research and advisory firm specializing in

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technologies for the retail and hospitality industries. “Start with the business strategy first and see where AI might fit into it. Don’t do AI just for AI’s sake.”

But they also emphasized that retailers need to embrace AI sooner rather than later—in fact, soon not using AI will make their job harder, said Tav Tepfer, chief revenue officer at Invent.ai, which specializes in retail inventory optimization solutions. “Your competitors are going to do it,” she said.

While operators need to implement AI to align with their specific business objectives and goals, there are a handful of practical ways any retailer can start using AI today.

“If you’re not comfortable using AI yourself yet, then you’re not ready to talk to a vendor about using AI for your business models.”

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PERSONAL TASKS You have to learn to crawl before you can walk. Sources agreed that the first place you should implement AI is for your own personal or professional use.

“If you’re not comfortable using AI yourself yet, then you’re not ready to talk to a vendor about using AI for your business models—and I say that as an AI vendor,” said Emily Nave, head of product at InStore.ai, a company that captures and analyzes store audio and delivers insights for the retail industry. “There are a lot of everyday practical uses that people don’t even realize they can do. You can get instant value from it.”

She suggested using free tools like ChatGPT or Claude, for example, to help brainstorm, work through decision-making processes by asking it questions, use as a search engine to get enhanced results or answers to questions, or to help jumpstart tasks like drafting emails or job descriptions. “It’s great at starting things up for you,” she said.

“Before a retailer even thinks about optimizing their business model with AI, start by applying it to some of the simple tasks you do every day,” added Wesley Bean, president and

chief operating officer at Engage3, which uses AI modeling for retail price optimization.

“We spend so much of our time in meetings.

How are you applying AI to help your decision-making process, whether it’s something simple like note taking, summarization or action item planning? Those are a great entry point to find efficiency.”

Buzek also said that for independent or smaller operators, AI can help with “getting knowledge about the business out of the head of the owner so it can be accessed by employees at any time.” He specifically cited using AI to create employee handbooks or document operating procedures. “Google’s NotebookLM is perfect for that. You load all those documents into it, and it becomes instantly queryable. Employees can just ask, ‘How do I deal with X.’” PRICING STRATEGY Optimizing pricing in a thin margin business is always a key focus for retailers, and it will continue to become more important as tariffs shake up the supply chain and the costs of goods and packaging.

“Right now everyone needs to be more nimble in terms of being competitive on price for both fuel and inside the store. So speed of pricing becomes of heightened importance,” said Bean.

He said AI helps by normalizing pricing quicker and faster than can be done manually, as well as by modeling scenarios as to how price changes can impact other areas of the business, from sales and profits across categories to topline numbers.

“You have all these different inputs across your whole portfolio and 10,000 different decisions that need to be optimized together.

Management of that complexity requires more sophisticated decision-based tooling embedded in the science of using AI to evaluate things,” Bean said. “It can look at individual categories and tell you where you might be able to be more elastic on pricing because the consumer is less sensitive, or where you can’t because the customer is wildly sensitive.”

Tepfer said AI can help by determining the right choice of three common scenarios for pricing that help retailers optimize their strategy—“dynamic pricing, which can tell

Using AI to recognize frontline employees and reward them for a job well done will also foster a positive company culture. you to increase or lower your price; promotional pricing, or promoting a product to get that bump in revenue you want; and markdowns to clear out inventory so you don’t lose too much money on it. But all of them need to have price elasticity, and you need to understand how much inventory you have to be really optimal,” she explained.

The same techniques can be applied to fuel, which Bean said is continuing to become more dynamic due to tariffs, oil prices and the global economy. “It’s putting retailers in a position where if you’re off by even a few hours, you’re getting the price wrong and might lose out to competition in your local market. We’re seeing multiple price points move throughout the day and retailers need to capture those to control margin and provide competitive prices for their customers. You just can’t afford to be lagging in terms of being priced right, but that’s where the AI technology can help and help retailers optimize against all the data points they have.”

INVENTORY MANAGEMENT For Tepfer, inventory management is an obvious use case for AI. “Retailers are constantly making decisions about what inventory to carry and how much, and getting that right every time can be hard. Inventory managers have thousands of different products to track, which they’re probably logging in spreadsheets, and millions of decisions to make, which they might be doing based on gut instinct or general rules,” she said. “It’s a difficult job and forecasting models alone don’t always make things better.”

What AI can do, she said, is take all of those decisions and dynamics into account and make a decision about what retailers should carry based on trends, seasonality, lead times,

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potential profit and other factors. “It takes actual data into account instead of relying on instinct for manual decisions. You want the data to tell you how to decrease your assortment or increase your assortment, for example, especially as tariffs come into play and there’s not as much money to go around,” she said.

She also noted that AI can help mitigate “phantom inventory.” Phantom inventory can happen for several reasons, she said, but it problematically reduces sales. “AI can send the store manager a report that says, ‘Hey, these are all things that are high on phantom inventory. Go check,’ or other alerts that force the problem to get fixed.”

As part of inventory management, supply chain optimization with AI can also help retailers manage costs, said Buzek. “Most of the trucks that are on the road right now are empty and aren’t picking things up along optimized routes—the ability to control that lowers cost and increases efficiency. Walmart has been dramatically successful in fixing that.”

DATA AND CUSTOMER PERSONALIZATION Tracking first-party customer data in a brick-and-mortar environment is notoriously difficult. “It’s one of the biggest limitations that convenience stores have,” said Buzek.

But as more opportunities arise that require customer data to pull off—retail media networks, loyalty programs or digital coupons

are all examples—AI can help turn physical foot traffic into real customer data retailers can use. “It’s really low-hanging fruit for AI,” added Buzek.

Sultan said he has used AI to recognize and track vehicles or capture customer demographic information through store cameras. He said he recently reached out to a company about a partnership, and it wanted to know how much foot traffic his stores had. Prior to using AI he would have had to ballpark manually or offer other metrics such as transaction counts, “but I just sent them a screenshot of what we’ve been tracking—how many customers come inside the store compared to how many cars are outside, how many customers we have, age groups and demographic info. Capturing this data makes us better partners and more attractive to vendors.”

It’s critical for marketing and retail media as well. “Imagine running a banner ad and being able to see exactly how many people actually looked at the ad, when they saw it and have information about them,” Sultan said. He is also looking at AI solutions for the future that will recognize license plates and connect cars to transactions, allowing him to know what specific customers purchase and how to target promotions or specific menu items to them. “We are looking at these kind of futuristic projects that will help us connect all the dots of our business,” he said.

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LOSS PREVENTION With loss prevention and theft top of mind for retailers, Sultan recently started using AI to mitigate shoplifting. He’s currently testing a “person of interest” tool that helps stores identify banned customers. “We have humans watching 24/7, but a step up from that is utilizing AI to detect people. For example, if someone shoplifts in the morning and we ban them from the store, that shift worker is only around for so long. The shoplifter ends up coming back later in the day to repeat the behavior with new employees.”

If the AI system recognizes a banned customer has entered the store, it will alert the employees.

“That’s pretty exciting for us, because humans obviously make mistakes or miss things. Even our live security goes through different shifts where there are different people watching. They’re not going to be able to tell who’s who, but the AI doesn’t miss a beat,” Sultan said.

“AI takes actual data into account instead of relying on instinct for manual decisions.”

EMPLOYEE ENGAGEMENT AND RETENTION The best use case for AI in Nave’s opinion?

“100% it is getting more out of your best employees.”

Retailers can use AI to increase retention, reduce turnover and foster employee engagement in a handful of ways.

First, reducing someone’s time spent on mundane or routine tasks essentially allows employers to scale them by freeing up their time for more important or quality activities. “I have employees where I joke, ‘Oh, I wish I had more of you.’ Now I kind of do because it takes them so much less time to do certain things,” said Nave. “Find those employees who have true skill and knowledge of the business and automate time-consuming parts of their job to free them up to do what really needs to be done.”

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Nave also noted that giving employees, including frontline workers and store-level employees, training for and access to AI will be “a huge career opportunity for them.

It’s a way for them to level up their resume, increase their career trajectory and get experience in tech when they might not have otherwise. That’s a benefit to them and in terms of attrition, this type of experience will get the right people to stay for longer and grow within your company.”

At Fav Trip, Babir uses AI to help evaluate the level of customer service his employees are offering. “We were able to have AI identify whether an employee was ‘present’ when customers came in, and we can see if its due to absenteeism, understaffing or someone doing multiple tasks,” he said.

“We have been able to address it and reduce those incidents, which helps with customer satisfaction as well.”

Using AI to recognize frontline employees and reward them for a job well done will also foster a positive company culture. “You can always find someone who is doing something wrong. But it’s hard to know about those little moments where an employee did something great if you’re not in the store all the time,” said Nave.

She said she has seen clients use InStore. ai’s technology to reward cashiers who did something outstanding for a customer when no one was watching—like a cashier who got a call from an elderly women who had run out of gas near the store, so he walked with a canister of gas to top her off and even drove her back to the station to fill up.

“That’s such a helpful and amazing thing the manager might not have ever heard about if it didn’t show up in the logs,” she said. “Being able to say, ‘Hey, look at what we heard you did, that was really great and the level of customer service we want,’ and then recognizing that employee—it makes them feel great about their job.”

Lauren Shanesy is a writer and editor at NACS and has worked in business journalism for a decade. She can be reached at lshanesy@ convenience.org.

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PRIORITIZING

Food Safety

Today’s hurdles are tomorrow’s opportunities for addressing traceability, implementing new technology and maintaining consumer trust.

BY CHRISSY BLASINSKY

T

homas Jefferson is often credited with this quote: “With great risk comes great reward.” That may apply in some areas of business, but when it comes to serving food, there is no reward for any level of risk in food safety and protecting public health. Zero.

This understanding within the c-store industry is why the NACS Food Safety Forum has become one of the most important industry events of the year. The 2025 Forum in Dallas hit record attendance and reached a level where, as one attendee suggested, we need a bigger boat.

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Kevin Smartt, president and CEO of TXB Stores, and Scott Zietlow, CEO, president and chairman of Kwik Trip

THE CEO PERSPECTIVE Food safety begins at the top, a sentiment echoed by TXB’s Kevin Smartt and Kwik Trip’s Dr. Scott Zietlow.

For both companies, fresh-prepared foodservice is a driving force that continues to transform how their customers engage with their respective brands. This commitment to food has changed their business models, with food safety as a core value within their companies and their cultures.

Smartt, the 2021-22 NACS chairman and president and CEO of TXB Stores, based in Austin, Texas, emphasized the importance of food safety—and not just in terms of preventing foodborne illnesses. He shared

Our food programs are growing, our guests trust our brands, and we’re proving that they trust our channel. That’s a huge responsibility for all of us.

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an example of a well-trained team member who was in a hurry and skipped an important safety procedure, which led to an injury.

“Those are the things that keep me up at night. We handle and cut a lot of fresh items, so I would really think about [your culture] and how team members” are staying safe, Smartt said.

Zietlow, the CEO, president and chairman of La Crosse, Wisconsin-based Kwik Trip Inc., said that food safety culture is an integral part of the overall organizational culture. He explained that it involves doing the right thing consistently, even when no one is watching, so that it becomes a way of life.

Like TXB, food safety culture at Kwik Trip is driven top down throughout the entire organization. “It’s reinforced in every meeting and it’s in our actions. We are committed to continuous improvement in everything that we do, and it’s how we get better every day,” said Zietlow.

LOOK FOR THE OPPORTUNITIES Several themes guided this year’s Forum: traceability, technology and trust.

First, traceability.

The initial compliance deadline for the FDA’s Food Traceability Rule was set to take effect on January 20, 2026. Earlier this year the FDA announced plans to extend the deadline by 30 months until the summer of 2028, but also said it has no plans to change the rule’s existing requirements.

The advice to retailers is keep moving forward—use the extra time to test your traceability plans while working with industry partners to ensure your company can meet compliance requirements.

Dr. Jennifer McEntire, founder of Food Safety Strategy LLC (foodsafetystrategy. com), said that traceability is “a data systems problem” that lands on food safety and quality assurance teams because the rule is in the context of a recall or foodborne illness event.

“For this rule, more so than other food safety-related rules, you need a diverse team

of people from IT, procurement and sales to come together because it’s a supply chain rule and it’s a systems rule,” she said.

Jon Cox, vice president of retail foodservice at McLane Company Inc., highlighted challenges the rule has posed thus far to companies working to ensure compliance: • Confusion/inconsistencies about whether certain items are on the Food Traceability List (FTL) and should/should not be traced, leading some firms to believe they need to take a “blanket approach” that is not necessary.

• Tracking the Traceability Lot Codes (TLCs), especially when companies ship and receive truckloads of products that may have multiple lot codes on multiple pallets.

This creates a complex system of separating all lot codes and transforming the data to ship to customers.

• Data inconsistency can also arise in how FTL items are labeled and traced. For example, different systems may have different names for the same product, making it difficult to get consistent data through the supply chain.

• Handling break packs, where products are shipped in smaller quantities than the original packaging. The TLC is often printed on the master case and not the smaller packs, which can make the product difficult to trace.

• Slow adoption of industry traceability approaches, such as using GS1-128 barcodes. (Go to gs1us.org for more information.)

Second, technology.

“Technology makes our lives easier, more efficient and more productive,” said Jason Borror, director of food safety and quality assurance, North America, at Circle K. Ask what problem you’re trying to solve and how technology can help.

For Circle K, technology is reshaping how food safety is managed and monitored, which leads to more proactive and accurate approaches to preventing foodborne illness.

“As new technology continues to emerge, it

It doesn’t matter how many stores you have—if you sell food, we are all responsible for adhering to high food safety standards.

Dr. Jay Ellingson, chief scientific officer at Kwik Trip

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“As food safety leaders, we should be looking at integrating technology throughout our organizations—not just to satisfy food safety and regulatory compliance, but also to ensure the appropriate controls are embedded to drive operational efficiencies and build a culture that can support our growth,” said Borror.

Amy Costello, director of food safety and quality assurance at Casey’s, and Shawn Stevens, founder of Food Industry Counsel LLC

The first conversation with a food safety team from a supplier company shouldn’t be when we’re having an issue with them. We want to know who they are, and we want to understand their culture. will likely revolutionize the food safety landscape, providing greater protection for our customers,” said Borror.

He explained how Circle K mapped its “physical” processes, which included manual temperature logs, equipment monitoring, labeling and corrective actions.

These processes were cumbersome, time consuming and relied on a ton of paperwork.

Borror shared a couple examples of where Circle K has implemented technology to improve operational efficiencies: • Automated equipment monitoring with sensors in coolers and freezers, which eliminated the need for manual checks • Integrating its production planner with the labeling platform to automate label printing based on the number of items prepared

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Third, trust.

Foodservice drove in-store sales in U.S. convenience stores to record levels in 2024.

It accounted for 28.7% of in-store sales and 38.6% of in-store gross margin dollars, according to the NACS State of the Industry Report® of 2024 Data.

Foodservice includes prepared food; commissary; and hot, cold, and frozen dispensed beverages. The broadest of the five foodservice categories, prepared food, generated nearly three quarters (72.6%) of all foodservice sales in 2024.

This growth in food prepared inside stores and oftentimes in front of customers—pizza, chicken, salads, sandwiches and wraps, burgers, roller grill items, soup—translates to the goal of building and maintaining trust that the food is high quality, fresh and safe.

Speaking to fellow food safety professionals in the room about the behind-the-scenes work of food safety teams, Amy Costello, director of food safety and quality assurance at Ankeny, Iowa-based Casey’s said: “We don’t necessarily want our guests thinking about the food safety departments in our organizations when they’re choosing our food. If they are, it’s probably because something had previously gone wrong.”

“Our food programs are growing, our guests trust our brands, and we’re proving that they trust our channel. That’s a huge responsibility for all of us,” she said.

Building consumer trust, according to Costello and Shawn Stevens, the founder of Food Industry Counsel LLC, goes hand in hand with the quality of products sold in convenience stores.

“When we see low quality coming through our systems, red flags should go off because that means safety is not a priority,” said

What Is the FDA Traceability Rule?

The U.S. Food and Drug Administration’s (FDA) Traceability rule is foundational to the agency’s New Era of Smarter Food Safety Blueprint and implements Section 204(d) of the Food Safety Modernization Act (FSMA).

The rule mandates recordkeeping requirements, in addition to existing regulations, for companies involved in the manufacturing, processing, packing or holding of foods on the FDA’s Food Traceability List (FTL).

Jason Borror, director of food safety and quality assuance, North America, at Circle K

Stevens. “If we enhance the quality of the product, it’s going to be safer.”

This hyperfocus on product quality also relies on supply chain relationships that keep the momentum moving forward on consumer trust.

Strong relationships with suppliers also help ensure compliance with food safety standards.

Costello and Stevens agreed that suppliers need to establish and meet their own internal food safety standards, and it’s important for retailers to know and understand the culture and programs of their suppliers.

“The first conversation with a food safety team from a supplier company shouldn’t be when we’re having an issue with them. We want to know who they are, and we want to understand their culture. We want to have those connections in place so that if an issue does arise, we know who we’re working with and we know how they’re going to approach it,” said Costello.

MANAGING YOUR RISK WITH 10 KEY FOCUS AREAS Dr. Jay Ellingson, chief scientific officer at Kwik Trip, outlined 10 key focus areas that every retailer can adopt to keep their brands, their customers and their employees safe.

These areas apply no matter the size of a c-store company.

These FTL foods include produce like leafy greens, fresh tomatoes, fresh cut fruits and vegetables, fresh cucumbers and ready-to-eat deli salads. Non-produce items on the FTL include shell eggs, nut butters, certain cheeses and finfish (e.g., salmon and tuna), to name a few. Foods that contain FTL ingredients are also covered by the rule, giving the rule wide reach.

Foods on the FTL require additional traceability information, called Key Data Elements (KDE), which are associated with specific Critical Tracking Events (CTE).

Many KDEs are already captured—locations, quantities, descriptions, etc.

The sharing of the Traceability Lot Code (TLC) has caused the most angst. In the event of an issue, such as an active foodborne outbreak, the FDA will require KDEs within 24 hours (or within a reasonable time the FDA agrees to).

Once a TLC is assigned, which can only be done at certain CTEs, it must stay the same as the food moves through the supply chain and can only be changed or removed if the food is transformed or undergoes a kill step. “License Plate Numbers” or other pallet identifiers commonly applied by distributors cannot replace the TLC. The information that companies must keep varies depending on the type of supply chain activities they perform with respect to an FTL food— e.g., the CTEs— from harvesting or production of the food through processing, distribution and receipt at retail or other points of service.

For comprehensive information on the traceability rule and a full list of FTL foods, go to FDA.gov to view a robust set of resources under the “FSMA Final Rule on Requirements for Additional Traceability Records for Certain Foods” section.

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Thank you to the Food Safety Forum Sponsors PLATINUM

DIAMOND

SAPPHIRE

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1. Food safety is a company-wide responsibility: Everyone, including the CEO, plays a role in maintaining high food safety standards.

2. Prioritize food safety among your employees: Ensure food safety is a top priority, just like the well-being of your team.

3. Engage with experts: Seek advice from industry experts and regulatory agencies.

4. Put the right people in the right roles: And provide them with the necessary support and resources to succeed.

5. Lead by example: Demonstrate food safety in everyday actions and decisions.

6. Honor and enforce policies consistently: Ensure actions align with policies and procedures.

7. Address potential issues correctly: Identify challenges before they become problems.

8. Involve experts: Engage microbiologists and other specialists to address critical and complex food safety concerns.

9. Invest in the right solution: Prioritize effective solutions for food safety, even if they are beyond the budget.

10. Take responsibility for your suppliers: Hold suppliers accountable to the same high food safety standards your company upholds.

These points emphasize that food safety is not a competitive advantage, said Ellingson.

“Protecting public health is our collective responsibility. It doesn’t matter how many stores you have—if you sell food, we are all responsible for adhering to high food safety standards.”

To do this, “You need to build a team,” advised Ellingson. “You need to have the right people to improve your food safety management systems if you’re going to be in the business of selling food. … We need to all work together to do this right, and I feel like the team is in this room today that can help the c-store industry,” he said.

That said, plan to be in the room at the 2026 NACS Food Safety Forum. Details will be shared at convenience.org/FSF. Chrissy Blasinsky is the digital and content strategist at NACS. She can be reached at cblasinsky@convenience.org.

WARNING: Cigars are not a safe alternative to cigarettes.

Smoking Out THE ILLEGAL VAPE INDUSTRY

How can convenience compete with vape shops when only one side plays by the rules?

BY MELISSA VONDER HAAR

O

ink drop/Adobe Stock

n February 20, 2025, New York Attorney General Letitia James sued the makers, distributors and retailers of illegal flavored e-cigarettes for hundreds of millions of dollars.

“For too long, these companies have disregarded our laws in order to profit off of our young people,” James said in a statement.

It was the latest example of states attempting to tackle what the U.S. Food and Drug Administration (FDA) has failed to do: tamper down the flourishing illegal flavored vape market in the United States.

“The vapor market is in complete disarray,” said Anna Ready Blom of NACS. “There is an influx of illicit vapes coming into the United States, many from China, that are being sold in vape shops and other stores around the country.”

It’s not that the FDA hasn’t tried. A joint task force with the Department of Justice has conducted several highly publicized seizures, including a $76 million seizure last July.

While $76 million sounds impressive, the data shows it’s just a drop in the bucket. Market research firm Circana estimates the illegal vapor market had $2.4 billion in sales in 2024, roughly 35% of all U.S. vapor sales. And that data doesn’t include online sales, or those made at independent retailers or vape shops.

NACS JUNE 2025 63

“Illicit product manufacturers, distributors and retailers have yet to experience any material

consequences for violating federal laws and regulations.”

64 JULY 2025 convenience.org

Not surprisingly, seizures and warning letters have done little to deter distributors and retailers from entering the space—as addressed in Altria’s Q4 2024 earnings call.

“Illicit product manufacturers, distributors and retailers have yet to experience any material consequences for violating federal laws and regulations,” said Altria CEO William F. Gifford, Jr. “At NACS, we remain frustrated with the inaction from the regulatory agency,” added Blom. “Our members are legal sellers doing the right thing and we are watching the playing field get completely unleveled.”

Here’s a breakdown of how we got here, the scope of the issue and what—if anything—can be done to relevel the playing field created by the illicit vapor market.

A BOOMING ILLICIT MARKET: HOW IT HAPPENED Most would agree the thriving flavor black market was created by not one, but two, failures at the federal level: an initial loophole that allowed flavored disposables to stay on the market and a frustratingly slow and opaque premarket tobacco product application (PMTA) process.

The FDA first sought to regulate vapor products with The Deeming Rule, published in 2016. This rule mandated that all electronic cigarette products that were on the market before August 2016 must submit a PMTA application by September 9, 2020, in order to stay on the market. Only products that filed PMTAs could be sold after that deadline.

In response to an increase in youth usage, the FDA later issued a February 2020 policy that effectively banned the sale of flavors other than tobacco or menthol. After that date, flavors could only be sold after that product received a marketing granted order (MGO) for its PMTA application.

The problem? Unlike the original deeming rule, this rule only applied to cartridge and pod-based vaping devices.

Flavored disposables and e-liquids were allowed to remain on the market.

Suddenly, the market was flooded with disposables, many of which were not on the market before the August 2016 date set by the deeming regulations and many that never bothered to submit a PMTA. To get around the PMTA requirement, flavored disposables became popular, claiming that the FDA only had authority over products using tobacco-derived nicotine.

The FDA has since extended deeming regulations to include synthetic nicotine and has ended the enforcement discretion that temporarily allowed disposable flavors to remain on the market. According to the agency, only vaping products that have received a MGO or have a PMTA currently under review are allowed to be sold.

Unfortunately, the agency is moving very slowly on those PMTAs. “Since the FDA Center for Tobacco Products’ inception in 2009, applications for nearly 27 million next-generation nicotine products have been filed,” said Matt Domingo, senior director of external relations for Reynolds American Inc. “Only 34 vapor products have received marketing granted orders. In the meantime, illicit disposable vapor products have flooded store shelves.”

Of those 34 approved vapor products, the FDA has only approved two menthol options … and zero other flavors. This fact is exceedingly frustrating for retailers losing sales to outlets selling illegal flavors.

“We wouldn’t be here if they were moving in an efficient, timely manner,” said Senior Category Manager for Yatco Energy, Anna Bettencourt. “I assure you if it took me this long to complete an important task at my job, I wouldn’t have one.”

HOW BIG IS THIS PROBLEM? With so many of the illegal vapor products being sold in untracked channels—including online and vape shops—it’s nearly impossible to properly gauge the market. But most agree it’s significantly more than the $2.4 billion/35% of the market estimated by Circana. Altria’s CEO estimated

“Only 34 vapor products have received marketing granted orders. In the meantime, illicit disposable vapor products have flooded store shelves.”

66 JULY 2025 convenience.org

Trusted Insights for Convenience.

The industry’s most valuable stats T

W

Get the Report / O

illegal vapes to represent over 60% of the market during the company’s Q4 2024 earnings call. At the 2024 Capital Markets Day, representatives from British American Tobacco (parent company of Reynolds) estimated illegal products account for two-thirds of vapor sales.

The size of this problem isn’t just an issue for retailers who are losing sales to the illicit market, but for the consumers using these unapproved, unregulated products.

Last year, Altria commissioned independent labs to look at the top-selling illegal flavored brands and found the following: • 9 of the 12 brands analyzed misrepresented their nicotine source (namely stating synthetic nicotine was used, when in fact, tobacco-derived nicotine was found).

• 10 of 12 brands misrepresented their nicotine concentration.

• 2 of 14 products that described themselves as being nicotine- free contained more than trace amounts of nicotine.

“The U.S. is overrun by illegal, unregulated and untested vapor products smuggled into the country from China,” said

“We rely on the regulatory agencies to give us

clarity and certainty.”

68 JULY 2025 convenience.org

Stefanie Miller, vice president of external affairs at Juul Labs. “Many of these products have not even attempted to comply with U.S. laws, with the vast majority not even submitting a premarket tobacco application with FDA.” Because these products are being sold illegally, it’s also more likely that the retailers selling them will not enforce other laws—namely age restrictions.

“Americans, including minors, are using these illicit products with harmful chemicals made in China,” Blom said. “It’s a worst-case scenario.”

And while Circana data shows that the FDA’s efforts have been successful in getting popular illegal brands like Elf Bars and Esco Bars out of the top-tracked sales list, others have popped up in their place.

This leaves retailers who do follow the law—only offering the FDA-approved unflavored options—with a losing hand.

“It’s created an unlevel playing field as some retailers continue to choose to sell illicit products, while others are taking a more compliance-first approach by not doing so,” said Domingo. “As a result, their businesses are under immense pressure in terms of the total market basket impact and shopper trips.”

HOW CAN IT BE FIXED? States have been trying to tackle the issue, with New York’s lawsuit as one example, while other states have created vapor directory laws. Blom points out that a state-by-state approach makes operations complicated for multistate operators. In addition, even states have been unable to determine which vapor products are and aren’t legal to sell under FDA’s purview.

“We need a federal solution,” she said.

Specifically, NACS has advocated for three things from the Center for Tobacco Products: complete its review of PMTAs, publish a list of products that can and cannot be sold and take true enforcement action against those manufacturing, distributing and selling illicit products.

By its own reporting, the FDA is behind on the PMTA process: The original deadline to review the applications filed in September of 2020 was September 2021. Since then, the FDA has only committed to completing a review of “covered” applications (products that had submitted PMTAs by 2020 and that represent at least 2% of retail vapor sales per Nielsen), which was supposed to happen by July 2023. As of last July, the agency claimed it had completed 185 of 186 of the covered applications. It is also still reviewing thousands of synthetic nicotine vaping PMTAs, with no timeline on those decisions.

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“Simply put, the

FDA needs to do what they said

they were going to do.”

“There is an urgent need to revisit how new products are brought to market while maintaining a stringent and transparent regulatory review process,” Domingo said. “An impartial system that encourages, enables and supports responsible innovation is required to accomplish this.”

Transparency is also key to NACS’ second ask: a list of what products are legal to sell. While the FDA has provided a list of products with marketing granted orders, it has not been clear about products that originally had a marketing denial order that was rescinded (like Juul), those who managed to get the courts to overturn a rejected or denied PMTA or which products have a PMTA currently under review.

“We rely on the regulatory agencies to give us clarity and certainty,” Blom said. “We have asked CTP for a list of products that can be on the market and a list of the products which can’t, by a product level. That list still does not exist.”

Bettencourt has first-hand experience with this problem, having brought in vapor products that she thought were legal only to later need to pull them from the shelves. “It’s absolutely part of the challenge,” she said.

Most importantly, there must be consequences for those breaking the law while simultaneously a legal market for consumers is created.

“It is imperative to prevent illegal vapes from entering the country and interstate commerce,” said Miller. “Preventing the importation and distribution of these products at their point-of-entry is critical to ending illegal products’ stranglehold on the market. At the same time, Americans who smoke deserve access to an array of authorized, smoke-free products in a variety of flavors. The FDA’s Center for Tobacco Products has the authority and technical expertise to create such a marketplace.”

70 JULY 2025 convenience.org

“While the FDA has taken steps by issuing warning letters, the real issue lies in the lack of robust enforcement,” Domingo added. “Stronger enforcement is needed and remains long overdue.”

“Simply put, the FDA needs to do what they said they were going to do,” Bettencourt said.

IS ENFORCEMENT EVEN ENOUGH? As the saying goes, the toothpaste is out of the tube. Flavored vapor products exist and, so long as the FDA refuses to consider allowing adult-oriented flavored products from responsible manufacturers, there will likely be a compelling black-market incentive for those willing to flaunt the law.

Begging the question: Can anything be done to fix this issue?

Responsible retailers are certainly feeling this frustration.

“Our retailers are really frustrated that the agency’s inac- tion on applications and its lack of transparency, has created this giant loophole that has led to illicit vapes coming into the market,” Blom said, noting that many NACS retailers have seen their customers go down the street to a vape shop that does offer illegal flavored vapes. “Frustrating might be a light way of saying it. It’s demoralizing.”

And it’s demoralized the industry’s view of the vapor category as a whole.

“I’m definitely not as bullish on vape as I was,” Bettencourt admits.

Only time will tell if the FDA can successfully fix what’s been broken.

Melissa Vonder Haar is the marketing director for iSEE Store Innovations.

Follow her on X at @iSeeMelissaV.

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Products are categorized the same way we organize the Cool New Products Preview Room at the NACS Show each year in October— New Design, New to the Industry, New Flavors, Health & Wellness, Green (EcoFriendly), New Services and New Technology.

Products are considered “new” this year if they’ve been introduced since October 2024.

The products featured here also can be seen in the Cool New Products Discovery Center at www.convenience.org/coolnewproducts.

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72 JULY 2025 convenience.org

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NACS JULY 2025 73

GAS STATION GOURMET

A Kentucky Kitchen Junction Station found foodservice success through tough love and putting in extra effort.

BY AL HEBERT

C

ustomers refer to Junction Station in Albany, Kentucky, as a convenience store on steroids.

“People are amazed at the store and how we run it. We’re a full-service restaurant. We have two dining rooms,” said General Manager Taylor Brown, adding, “Really, we’re a truck stop, but we don’t have showers.”

There are two Junction Stations. The flagship store is the Albany location and

a store in Byrdstown, Tennessee is a bit smaller. Linda Crouch, her brother, Ernie Elder, and their mother, Kay Elder, purchased the Albany location in 2013 and the Byrdstown store in 2023.

Linda’s daughter, Jolinda Pryor, serves as the head of operations, running the day-to-day business.

“Albany is the heart of the operation,” Brown said. “We have about 65 employees and run 24/7, 365. The

Byrdstown store has 30 employees and is also open 24/7, 365.”

Crouch said, “There are three things we tell our people. First, we want a clean store and good food. The second thing is we want clean restrooms. The third thing is good customer service. We train our employees on good service.”

The restrooms bear special mention.

“At one time we got so serious, we had a professional company come in and

BY AL HEBERT

Caption Junction Station has leaned into delivery, with a website that feels like you’re ordering from a full-service restaurant.

74 JULY 2025 convenience.org

clean them. Now we have staff that keep it clean and check them every hour.

It’s sometimes difficult,” Crouch said.

“People have told us they drive 200 miles to stop for our restroom. It’s really important. Restrooms rank number one in customer priority.”

BUILDING WITH FOOD FIRST Crouch’s mother was in the c-store business. She owned the Byrdstown location and sold it in 2007. Crouch bought it back in 2023.

“Our family always said that we would never own a restaurant. My mother struggled to find the right food,” Crouch said. So, the family made the decision to hire someone who had been in the restaurant business to help things get started off right. “[The advisor] asked if I tried this or that menu item. I’d say no. She said you have to try everything. She was tough, and sometimes had us in tears. She didn’t hold anything back, which we needed,” Crouch said. “It woke us up—we had to get serious about what we served.”

The store doesn’t rest on its laurels.

“We still want to do the same thing: constantly improve the customer experience. We keep getting more digital. We’re using apps where we used to use menu sheets. We know if we don’t change, we can’t continue to grow. We want to continue to make sure that we offer the best value for the money,” said Crouch.

Photo caption

Linda Crouch, owner, and Jolinda Pryor, operations manager

SUCCESSFUL FOODSERVICE OFFERS Crouch’s brother, Ernie, insisted that the store have a good hamburger. “He was on us. He wanted a hamburger that tasted good on a bun,” Crouch said.

The store focused on having good meat with the right fat content. There’s minimal seasoning on the burger. It’s presented open-faced on the plate.

“Hamburgers were the thing that got us started. If you have good food, people will come back,” Crouch said.

The meatloaf at Junction Station is popular. “We put our meatloaf special out and in 30 to 45 minutes the first 10-pound pan is gone. We have to put another one out,” said Brown. Junction Station made a commitment to using fresh ingredients. Staff grind the meat in the store for its burgers and meatloaf.

“About three or four years ago we decided to add a second kitchen.

We have fruit and we make our own cookies, cakes, yogurt and cobblers

here. We have a fresh market. The fresh market business has gotten big in the last two years,” Crouch explained.

Delivery is a key part of what makes foodservice work for Junction Station.

“We do up to 20 deliveries in one shift.

On Super Bowl weekend we make a lot of deliveries. We do a lot of pizza on those days,” Brown said. “In the summer things are very busy.”

“We have daily specials. People will call and ask what the special is. We sell a lot of our specials. This is a good service for customers who can’t come in,” Brown said. Local businesses use it as well: “We have some businesses that we deliver to each day,” Brown said.

Al Hebert is the Gas Station Gourmet, showcasing America’s hidden culinary treasures.

Find him at www.

GasStationGourmet.com.

NACS JULY 2025 75

CATEGORY CLOSE-UP COMMISSARY

A Shrinking Slice of a Growing Pie Commissary loses share of foodservice, but suppliers see opportunity ahead.

BY TERRI ALLAN

$1,356

The average gross profit dollars commissary makes per store, per month.

Source: NACS State of the Industry Report® of 2024 Data

Industry Sales

% of In-Store Sales

iStock/monticelllo

F

oodservice commissary sales in convenience stores last year were flat as the category confronted an increasingly financially challenged consumer on one hand and continued loss of foodservice share within the c-store environment to prepared food on the other. Still, vendors and distributors maintain that the commissary category plays an important role for independent retailers with limited resources for a full-scale foodservice program and quality-control assurances for multioutlet c-stores, with opportunity for all retailers to capitalize on emerging consumption trends.

Flat commissary sales in 2024 “was not an anomaly,” said Matt Hautau, vice president of merchandising at Core-Mark, as it was in line with trends for other c-store categories. “We’re in a recessionary environment. Trips are down and basket size is down,” he explained. The recent inflationary environment, Hautau continued, “is dragging down c-store consumers and challenging significant behaviors that we’ve benefitted from for a long time.

Commissary isn’t being challenged any more than other commodities.”

Overall foodservice sales—which includes prepared food; commissary; and hot, cold, and frozen dispensed beverages—accounted for 27.7% of in-store sales and 38.6% of in-store gross margin dollars in c-stores in 2024, according to preliminary NACS State of

the Industry Report data. Prepared food is the dominant player, with a whopping 72.5% share of foodservice sales in 2024.

“Commissary—which includes the subcategories of sandwiches and wraps, ready-to-eat meals; thaw, heat and eat; and sides and salads—is often touted as one of the most convenient options for consumers on the move,” remarked Emma Tainter, NACS research analyst.

“Consumers are looking for convenient grab-and-go options that commissary can provide and, according to 2023 Convenience Voices data, 21.9% of respondents said they purchased commissary within the last two weeks.”

Indeed, the commissary category enjoyed sales increases throughout the pandemic, recording year-over-year sales gains each year through 2023, Tainter added.

Among commissary subcategories, sandwiches and wraps (43.9% of category sales in 2024) and ready-to-eat meals (34.8%) dominate.

CONSUMERS PINCHED While inflation edged down somewhat in 2024, “consumers are still feeling pinched,” said Tainter. “When prices go up, rarely do they go down.” As a result, commissary items—particularly those comprised of fresh fruit and vegetable ingredients—have been impacted.

Inflationary concerns in 2025, of course, have only intensified, and the category could again suffer the consequences.

1.45% 1.08% 2023

2024

Avg. Sales/Store

$3,982 $3,873 2023

2024

Gross Margin %

35.63% 35.01% 2023

2024

Source: NACS State of the Industry Report® of 2024 Data

NACS JULY 2025 77

CATEGORY CLOSE-UP COMMISSARY Commissary Sales January 2022-December 2024

n 2022

n 2023

n 2024

OCT

NOV

DEC

$2,500 $2,000 $1,500 $1,000 $500 JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

Source: NACS CSX Convenience Benchmarking Database

The Power of CSX Data CSX, the engine behind category metrics and NACS State of the Industry data, provides current and customizable tools for financial and operational reporting and analysis in the convenience industry. Retailers can measure their company by any of the myriad metrics generated via our live database.

Contact Chris Rapanick at (703) 518–4253 or crapanick@convenience. org for a complimentary executive walkthrough.

In addition to inflation, the commissary category is facing stiffened competition from store-made food offerings. “Prepared food is where people are moving to and commissary is being adversely impacted,” explained Tainter, noting, though, that c-stores that have their own commissary programs appear to be bucking the trend.

Jon Cox, vice president of retail foodservice at McLane Co., said that while commissary may be losing share to prepared food in c-stores, it’s important to note that “food is growing overall.

Consumers today have more options, so the pie itself is getting larger.” While it used to be that commissary was the only option for items like sandwiches and salads for c-store consumers, that has dramatically changed, Cox said.

“Commissary is still a big part of foodservice. It’s just that now there are more offers,” he explained.

BIG BENEFITS The foodservice commissary category continues to provide retailers with a number of benefits. Labor savings are a key attribute. Hautau explains that the implementation and maintenance of a prepared foods program can be too sophisticated and costly for some operators. “You have to have the right labor and the right training,” he

78 JULY 2025 convenience.org

Having commissary with other foodservice products makes you a destination for food. remarked. “That complexity makes it more difficult to execute,” while with commissary, food production is largely in the hands of the supplier.

Food safety and quality is another consideration. Commissary products, such as those from McLane, are produced in federally regulated facilities. “The products meet label and nutritional guidelines,” said Cox, noting that with onsite food production, if a retailer runs out of a certain cheese, for example, and substitutes it with another, the label needs to be changed as there could be different allergens.

Commissary Subcategory Data Percent of Sales

Avg. Sales/Store

Avg. GP$/Store

Gross Margin %

2023

2024

2023

2024

2023

2024

2023

2024

Sandwiches and Wraps

44.0%

43.9%

$1,752

$1,701

$688

$652

39.30%

38.34%

Meals, Ready-to-Eat

31.6%

34.8%

$1,257

$1,350

$445

$491

35.41%

36.41%

Sides and Salads

20.4%

17.7%

$812

$685

$223

$158

27.43%

23.00%

Thaw, Heat and Eat

4.1%

3.6%

$162

$138

$63

$55

38.88%

39.92%

Total

100%

100%

$3,982

$3,873

$1,419

$1,356

35.63%

35.01%

Source: NACS State of the Industry Report® of 2024 Data

Moreover, commissary facilities allow for a consistent product, an important factor for multistore operators. “The national customer is a great fit” for a commissary program such as McLane’s, Cox said. “We offer consistent ingredients, such as a ham and Swiss sandwich on a pretzel bun,” with the potential for national distribution. But such products are also available to regional operators, he noted, allowing them to “offer something unique in their marketplace.”

Paul Dodson, vice president, business development, at NuVue Foods, said that commissary programs such as his company’s fresh and frozen lines can easily supplement c-stores’ own prepared food items. “Even for some stores that do their own on-site building of product, we can supplement with unique items like pretzel rolls that they may not be able to get,” he explained.

Cox also sees opportunity for commissary in stores that are focused on proprietary foodservice items. “If you’re building a pizza or chicken program, building a sandwich may not be your core competency,” he said, advising, “do what you do really well and use commissary as an additional piece.”

The biggest challenge to commissary products, vendors note, is the potential for spoilage and resulting waste. But spoilage and waste will vary depending

upon how the product is packaged, stored and delivered. “Our product is fresh, never frozen,” said McLane’s Cox, “so the clock starts ticking immediately.” With a seven-day shelf life, McLane’s Central Eats products can be ordered in small quantities and piece picked, helping to reduce spoilage.

NuVue Foods also offers a fresh line of sandwiches to Midwestern c-stores.

“But we saw a need for products that require a longer shelf life, as some c-stores don’t have the discipline for high waste that comes with a fresh

program,” explained Dave Salerno, president of NuVue Foods. “So, we developed products that freeze and thaw appropriately for c-stores. We’ve filled the gap for c-stores that don’t have a labor force for their own commissary.”

OPPORTUNITIES ABOUND Despite commissary’s lost share within foodservice in recent years, suppliers and others see opportunity for the category thanks to emerging consumer and daypart trends. “People are moving away from three meals a day and

NACS JULY 2025 79

CATEGORY CLOSE-UP COMMISSARY

snacking more,” noted NACS’ Tainter.

This could bode well for commissary products like packaged salads, pickles, hard-boiled eggs, cut fruit and veggies.

Cox and Hautau point to growing demand for protein-filled snacks and the role that commissary could play.

Consumers on GLP-1 medications, for example, are “now snacking in a different way,” Hautau remarked, paving the way for innovation within protein-enhanced snacks.

And while the lunch daypart tends to encompass most c-store commissary sales, breakfast shows significant potential. Commissary suppliers now showcase a wide variety of breakfast sandwiches—designed for both the cold case and warmer. Indeed, Dodson notes that while commissary sandwiches are synonymous with lunchtime sales, in actuality, many of those sandwiches are purchased from the cold case in the morning for consumption later in the day.

Commissary vendors also see potential for new product offerings. In the spring, McLane expanded its Fresh program to feature King’s Hawaiian sliders and sandwiches, as well as a Central Eats watermelon and mango cup with tajin. The new products “help c-stores get creative,” Cox explained.

“C-stores want differentiation but they also want new products to be easy to execute,” the McLane executive said.

NuVue Foods, meanwhile, introduced its Craver Bowl line last fall, and according to Dodson, the company has received a lot of positive feedback.

“While the bulk of our business is still between the buns, Craver Bowls appeal to retailers interested in something to supplement their sandwich business and consumers who want something to eat with a fork or spoon that feels hearty,” he said of options like the meat lover’s breakfast and Southwest-style taco bowl. New products for c-stores from Core-Mark include Fresh Take Crustless sandwiches in peanut butter 80 JULY 2025 convenience.org

Commissary is still a big part of foodservice. It’s just that now there are more offers.

and strawberry jam and peanut butter and grape jelly flavors, with more flavors in the works. The new items are 2.8 ounces each and are “a nice grab-and-go snack or meal component and respond very well to 2-for pricing,” Hautau said.

Simple adjustments like “different carriers, different sauces and different cheeses” can go a long way in sparking commissary sales,” Cox advised.

Dodson’s recommendation to c-stores is that “there’s waste in all aspects of foodservice, not just commissary,” and c-store operators have to be able “to stomach throwing away some food.”

But the most effective way to drive sales of commissary products, suppliers agree, is to properly merchandise the items. Dodson encourages retailers to merchandise a stocked cold case whenever possible. “No one wants to see just two sandwiches in there,” he explained.

Hautau believes that commissary items can spark impulse sales and build larger baskets if merchandised creatively. And Cox advises c-stores to promote the category with signage and bundling promotions, such as sandwiches with chips. But most of all, the McLane executive encourages retailers to not give up on the commissary category. “Having commissary with other foodservice products makes you a destination for food,” he said. “Just because sales may be flattening, they’re flattening in a bigger pie.”

Terri Allan is a New Jersey-based freelance writer, specializing in consumer products and retail channels.

She can be reached at terri4beer@aol.com.

Taking Commissary Into Its Own Hands KWIK TRIP SEES VALUE IN MANAGING ITS OWN GRAB-AND-GO OFFERINGS. Some multiunit retailers have taken commissary into their own hands with their own central kitchens and distribution systems, preparing and delivering grab-and-go items to individual locations, all while controlling labor costs and ensuring the safe and profitable sale of sandwiches, sides, and individual meals.

Kwik Trip, with some 900 stores in five Midwestern states, operates its own commissary on its 141-acre campus in LaCrosse, Wisconsin—part of its vertical distribution approach to the convenience store business. This site is where most of the products merchandised in its fresh cases are produced. The chain’s own commissary operation has grown exponentially since the installation of open-air cases in its stores for items like sandwiches, salads and produce in 2005. In 2020, take-home meals were added. In addition to the commissary items, Kwik Trip stores also feature in-house kitchens for the preparation of its Hot Spot offerings, including burgers and fried chicken.

“The commissary allows us to make more complex items without utilizing a lot of store labor,” requiring extensive staff training, said Micah Rupprecht, director, category management, foodservice. “There’s also a better consistency in portions and look.”

Kwik Trip’s commissary space is generally reserved for high-margin, lower-volume items than those produced in store. Rupprecht points to “fast-moving, fast-velocity” sandwiches such as egg, cheese, and sausage on a croissant ($3), which are easily made at the store level, while smaller volume but more upscale offerings ($5 and above)

are usually produced in the commissary and merchandised in the cold case. Sales of those items, he said, may only amount to 25,000 units a week systemwide, but still provide good margins. Another benefit to the centralized production of some items over in-store assembly comes down to space. “With c-stores so pressed for space, there isn’t the need to stock all of those ingredients at the store level that would be needed to make the items,” Rupprecht explained.

Among commissary items, sandwiches and two-pack egg cups are the most popular, the Kwik Trip executive reports. Turkey and Swiss cheese on cranberry wild-rice bread is a customer favorite, along with multi-meat sandwiches (ham, turkey, roast beef). New wrap sandwiches launched late last year, meanwhile, have also received a strong response, and Rupprecht expects demand will climb higher this summer thanks to anticipated increases in store traffic. Introduced over 10 years ago, the hard-boiled egg cup, has seen consistently strong sales. In addition to the convenience factor, Rupprecht points to growing consumer demand for protein for helping to drive sales. “Protein has always been top of mind for the fresh case,” he remarked.

“While the better-for-you trend used to be about reducing carbs, now it’s about increasing protein.”

But Kwik Trip’s commissary customers also can’t resist a sweet indulgence.

Kwikery pudding parfaits with Oreo cookie pieces—launched recently in partnership with Mondelēz, and available in both vanilla and chocolate varieties—have received a great response. “We’re selling a couple a day per store,” Rupprecht said, “even if it runs counter to the better-for-you movement.”

NACS JULY 2025 81

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Thank you to these advertisers who have demonstrated their support of the convenience and fuel retailing industry by investing in NACS Magazine.

ADVERTISER INDEX Contact Information

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Altria Group Distribution Company...................... Inside Front Cover AGDCTradeRelations@Altria.com www.altria.com www.tobaccoissues.com BIC Corporation............................................................................... 17, 72 www.us.bic.com/en_us Chyl Brand LLC..............................................................................................38-39 (404) 642-4967 www.getchyl.com

Cool New Products Guide.......................................................................... 72-73 www.convenience.org/Media/NACS-Magazine/Cool-New-Products

FasTrax POS LLC................................................................................................... 9 www.fastraxpos.com ITG Brands............................................................................................. 25 (866) 328-2485 www.itgbrands.com Kretek International....................................................................................31, 65 www.kretek.com Liggett Vector Brands LLC........................................ Inside Back Cover (919) 990-3500 www.liggettvectorbrands.com

Contact Information

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Contact Information

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McLane Company, Inc..........................................................Back Cover (254) 771-7500 www.mclaneco.com

Premier Manufacturing............................................................................... 5, 53 (636) 537-6800 www.gopremier.com

Monster Energy Company.................................................................. 73 www.monsterenergy.com

Sesh Products US, Inc........................................................................................71 www.seshproducts.com

MOOSOO Corporation.........................................................................................15 www.moosoo.com

Stone Gate Foods.............................................................................................. 73 (952) 445-1350 www.stonegate-foods.com

NACS 24/7 Day................................................................................................... 83 www.conveniencecares.org/24-7-Day/ NACS Convenience Voices................................................................................69 www.convenience.org/Solutions/Business-Intelligence-DataAnalytics/Convenience-Voices NACS Show 2025............................................................................................... 82 www.nacsshow.com NACS State of the Industry Report ............................................................... 67 https://www.convenience.org/Solutions/Business-IntelligenceData-Analytics/NACS-State-of-the-Industry-Enterprise ®

NACS TruAge......................................................................................................40 www.mytruage.org Polar King International Inc.............................................................................. 3 (866) 576-7645 www.polarking.com www.polarleasing.com

Suntory Global Spirits........................................................................... 7 www.suntoryglobalspirits.com Swedish Match North America LLC (Game)......................................61 (800) 367-3677 www.smna.com Swedish Match North America LLC (ZYN)..........................................19 (800) 367-3677 www.smna.com Tote.ai ................................................................................................................50 www.tote.ai Trion Industries .................................................................................................13 (800) 444-4665 www.triononline.com

WE SEE YOU. WE THANK YOU.

24/7 DAY Every July 24 (24/7 Day), the NACS Foundation unites convenience stores across America in recognizing first responders, medical personnel and American Red Cross volunteers who work around the clock, 24/7, to serve our communities. Now in its seventh year, the event unifies the collective efforts of 30,000+ convenience stores that honor and thank the extraordinary commitment of hometown heroes with items like a hot cup of coffee, cold beverage or a breakfast sandwich.

To learn more about participating, contact Kevin O’Connell at koconnell@convenience.org, or visit 247Day.org.

The American Red Cross name, emblem and copyrighted materials are being used with its permission, which in no way constitutes an endorsement, express or implied, of any product, service, company, opinion or political position. The American Red Cross logo is a registered trademark owned by The American National Red Cross. Should you require a receipt, please donate by calling 1-800-RED CROSS (1-800-733-2767), or give online at redcross.org

NACS JULY 2025 83

BY THE NUMBERS

How Profitable Was the 2024 Basket?

Basket Value

$7.17

The average in-store basket value in 2024 was $7.17, according to NACS CSX data.

This increased 6 cents year over year, but growing expenses chipped away at profitability.

Retailers can use this basket-profitability exercise to evaluate the overall health of the inside business without the influence of fuel gross profit dollars.

Less Cost of goods

$4.47 Inside GP$ + Other Income per Transaction

Other income includes lottery, carwash and ATM fees.

$2.89 The largest line of direct store operating expenses (DSOE) is typically wages and benefits.

Less Net DSOE + Facility Expense per Transaction:

$2.93

= 84 JULY 2025 convenience.org

Inside Operating Profit/Transaction:

-4¢

2024 basket profitability decreased by 13 cents year over year.

Source: NACS State of the Industry Report® of 2024 Data

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