The traditional convenience growth model is under pressure, and future winners will build new capabilities, not simply improve existing ones.
This insight came from Art Sebastian, a convenience-industry veteran and founder and CEO of retail consulting firm NexChapter, Des Moines, Iowa. Sebastian was part of a panel giving the industry its first look at CSP’s second-annual data-driven Outlook Report at CSP and Informa Connect’s Outlook Leadership event on Aug. 5 in Rancho Palos Verdes, California.
- To download a free copy of the Outlook Report 2026: The Future of Convenience Retail, click here.
The panel also included Donna Hood Crecca, senior principal at CSP sister research arm Technomic, Chicago; Erik Ogren, president of Woodbury, Minnesota-based Patron Points; and Thomas Weinandy, senior research economist at Washington, D.C.-based Upside.
The report identifies five strategic shifts that will separate industry leaders from the rest of the market.
“Inflation, margin pressure and labor continue to dominate executive attention, forcing retailers to balance growth with profitability,” according to the report.
The c-store industry is at an inflection point, according to the report, which has five outlooks that are designed to help leaders move beyond reacting to today’s challenges and prepare for what’s coming next.
The five Outlooks emerged consistently across the research, interviews and industry conversations, Sebastian said, and represent where they believe the industry is heading over the next three to five years.
“We believe that the traditional convenience growth model is under pressure,” Sebastian said. “We certainly have headwinds impacting the business. We have macroeconomics, we have global conflict. We have things closer to home in terms of gross margins in our stores [and] new customer behaviors emerging. So the pressure is real.”
He added: “We do believe that those that win will focus on building new capabilities to address these pressures.”
Customer ownership
The first outlook is that customer ownership becomes the competitive advantage.
Consumers have more choices than ever before, the report said. Cross-shopping is increasing, loyalty membership continues to grow and digital channels are multiplying customer touchpoints.
“Cross-shopping has been a very important trend that not enough retailers are paying attention to simply because it involves data that’s off-site, and that’s just a blind spot for many retailers,” Weinandy said. “They don’t know what their customers are doing when they’re not on the forecourt or inside the store.”
While retailers have invested heavily in loyalty, many still struggle to convert membership into meaningful engagement and long-term customer value, the report said. The retailers that own the customer relationship, not simply the loyalty program, will create the greatest competitive advantage over the next decade. The real opportunity is turning customer data into stronger relationships, higher engagement and greater lifetime value, according to the report.
The retailers who truly know their customers will outperform those that simply operate the largest loyalty programs.
Loyalty and personalization ranked second, behind foodservice, as the factors most likely to drive growth.
“The business case for loyalty is clear,” the report said. “Members visit more often, shop across more categories and spend more each trip.”
Retailers must move beyond points-based loyalty and begin managing customer lifetime value. Winning organizations will connect loyalty, personalization, retail media and digital engagement into a single customer strategy that creates more frequent visits, larger baskets and stronger long-term relationships.
Retailers should:
- Unify customer data to create a single view of every customer
- Personalize every interaction using loyalty, digital and retail media together
- Manage customer lifetime value by rewarding behaviors that increase retention, frequency and basket size
Foodservice primary growth engine
The second outlook is that foodservice becomes a primary growth engine.
Traditional profit drivers such as fuel and tobacco continue to face long-term pressure, while customers increasingly expect fresh, convenient meal solutions, the report said. Foodservice offers higher margins, stronger loyalty and more frequent visits, but consistent execution requires new operating models, labor strategies and investment.
“The challenge is no longer whether to invest in foodservice, but how to build the right model for your business,” the report said, adding that foodservice is no longer a niche offering. Nearly 9 in 10 retailers view it as critical or very important to their future growth strategy.
Operators must invest in execution, and the two key parts are equipment and employees, Crecca said. Equipment should be modern, low skill, low labor, fast, efficient and maintained well, she said. Employees should be given training and education, along with key performance indicators (KPIs) and some incentives.
If retailers can execute at the store level, they can give a great customer experience, Crecca said.
“The guest has no patience,” she said.
If what they’re spending their money on is not done right, “they are unforgiving, so you’ve got to nail the execution.”
Foodservice, at 77%, stands apart as the industry's largest growth opportunity, ranking well ahead of every other category over the next three years. It is more than double the second-place growth opportunity, private brand, at 35%.
Convenience retailers are no longer just competing with each other, they're competing directly with QSRs for meal occasions and customer visits. And retailers are prioritizing the fundamentals first: better grab-and-go, fresher food and a stronger made-to-order experience. Foodservice growth depends on people, and staffing remains one of the biggest constraints to scaling the business.
“Labor shortages don’t just affect hiring, they impact throughput, consistency and ultimately the customer experience,” according to the report.
Retailers should design foodservice strategies that fit their customers, brands and operating capabilities rather than attempting to replicate industry leaders. Success will depend on disciplined execution, operational simplicity and creating reasons for customers to visit beyond fuel.
Retailers should:
- Build the right foodservice model based on customer demand and operational capabilities
- Execute consistently through simplified menus, standardized processes and the right labor model
- Create repeatable traffic by integrating foodservice with loyalty, digital ordering and personalized offers
Dive into data
The third outlook is that data becomes the retail operating system
Retailers have access to more customer and operational data than ever before, yet much of it remains fragmented across systems and departments, according to the report. As personalization, retail media, pricing and AI become increasingly data-driven, disconnected information slows decision-making and limits growth opportunities.
Loyalty has become the catalyst for tech modernization, driving investment in the data and digital capabilities that power personalization, the report said. Most retailers don't have a data problem, they have a connectivity problem. Critical customer and operational data still lives in disconnected systems.
In addition, the modern data stack is becoming core retail infrastructure, enabling faster decisions instead of simply producing reports.
“Connected customer data should become foundational infrastructure rather than another technology project,” the report said. “Retailers that unify data across merchandising, marketing, operations and finance will make faster decisions and create better customer experiences.
Retailers should:
- Modernize the data platform to connect every customer and operational data source
- Create trusted, governed data that every department can use with confidence
- Turn data into action by powering personalization, forecasting, pricing, retail media and AI in real time
AI shapes retail execution
The fourth outlook is that artificial intelligence and agents shape retail execution.
Artificial intelligence is quickly moving from isolated experiments to enterprise capability, according to the report. While many retailers are exploring AI, few have embedded it into everyday decision-making. The greatest advantage will come not from adopting more AI tools, but from integrating AI into pricing, forecasting, labor, personalization and operational workflows.
Most retailers are still in the experimentation phase, with AI concentrated in isolated use cases rather than enterprise-wide transformation. In addition, today’s AI investments are focused on improving decisions and efficiency, with analytics, pricing and forecasting leading the way.
However, trust remains the biggest barrier to AI adoption, with accuracy, privacy and data quality outweighing concerns about the technology itself.
AI isn't one capability, it's a collection of technologies that solve very different business problems. The opportunity is to match the right AI capability to the right use case, rather than searching for a single AI solution.
Look at AI as a tool and not as the answer, Ogren said. “Because you still need that human interaction,” he said. “You still need that critical thinking, that creativity.”
If a retailer isn’t using AI, they should start out small engaging with it, he said.
The report also noted that agentic commerce is still in its early stages, but it has the potential to fundamentally change how consumers discover, evaluate and purchase products. And consumers want AI to remove friction, helping them find value, compare options and make faster purchasing decisions.
“Retailers should focus first on solving operational problems with AI while building the governance, data and organizational capabilities needed to support future innovation,” the report said. “AI will increasingly become an expectation rather than a differentiator.”
Retailers should:
- Solve business problems before deploying AI. Start with use cases that improve revenue, margins, labor productivity or customer experience
- Equip employees with AI. Use AI to augment decision-making across corporate teams and store operations
Talent, operating models
The fifth outlook is talent and operating models become the ultimate differentiator.
Technology continues advancing faster than organizations can adapt, according to the report. Retailers face growing shortages in AI, customer analytics, loyalty, foodservice and leadership capabilities while legacy structures slow innovation and decision-making. Future success will depend as much on organizational agility as technology investment.
Technology is becoming easier to access. The real competitive advantage will come from building organizations that can adapt, learn and execute faster.
The talent shortage isn't just in technology, it’s in the capabilities required to compete in the next era of retail. Closing the AI, loyalty and data skills gap might become one of the highest-return investments retailers make over the next decade.
The pace of innovation is accelerating, with most retailers now moving from idea to pilot in six months or less, the report said, adding that the next challenge isn't piloting faster, it’s scaling successful ideas across the enterprise.
Technology isn't the biggest barrier to innovation. Competing priorities and legacy systems continue to slow organizational progress.
The retail organizations that win in 2030 will be faster, more collaborative and increasingly powered by data and AI.
“Competitive advantage is shifting from technology to organizational capability,” the report said. “Retailers must develop new talent, redesign how teams work together and create operating models that can move from insight to action at a much faster pace.”
Retailers should:
- Build AI, data and digital capabilities across every business function
- Reduce dependency on legacy systems by simplifying processes and modernizing workflows
- Empower teams to experiment, pilot and scale new ideas through faster, cross-functional decision-making
Optimism abounds
Despite today's challenges, industry leaders remain overwhelmingly optimistic about the future and see significant opportunities for growth.
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