Most fuel customers treat the gas pump like a deserted island. They pull up, refuel, and escape before ever exploring what’s just a few steps away. But the island doesn’t make money. The margin is inland.
The reality is that most consumers think filling stations make their money from gas. They will point to the price-per-gallon sign if you ask them, when the truth is profits are mostly made away from the pump.
C-stores unlock real profit only when fuel customers step off the island and into the store, where foodservice and inside sales carry the highest returns. Fuel brings the traffic. Prepared foods, beverages, and grab-and-go offerings turn that traffic into revenue worth caring about.
While fuel remains the largest share of c-store revenue, profit tells a different story. According to the National Association of Convenience Stores (NACS), retailers have averaged 27.2 cents per gallon in gross margin over the past five years, about 10–11% of the pump price. After accounting for credit card fees, rent, utilities, freight, and labor, the net profit often drops to just a few pennies per gallon.
Meanwhile, foodservice and c-store items deliver margins several times higher. In 2023, fuel generated 67.3% of all revenue but only 38.6% of total profit.
The pump is a traffic driver, not a profit center. The money lives inside the door.
NACS data shows foodservice continues to drive the strongest financial performance. In 2024, it delivered nearly 29% of in-store revenue and about 40% of in-store gross margin dollars. The challenge, though, is that not all customers will enter the store. NACS estimates that about half of customers pay at the pump and leave without ever entering the store, a phenomenon known as "gas-and-go" customers. How can c-store operators get customers inside, then? By diversifying and optimizing their product offerings.
Operators leaning into hot foods, sandwiches, pizza, cookies, coffee, and cold beverages are shifting their business model toward higher-margin categories, which often include simple, low-labor programs that give customers a reason to step off the island and into the store.
The shift starts with visibility. Customers are far more likely to walk in when they can see or smell something worth the trip. A fresh roller grill turning hot dogs and taquitos, signals immediate convenience and consistent quality. A well-lit merchandiser showcasing hot pizza slices communicates speed and freshness through the front glass. And pairing a premium coffee bar with ready-to-grab breakfast or lunch items gives commuters something fast, hot, and familiar.
Though electric vehicle drivers are changing the traditional c-store foodservice model (a topic we'll address in a future piece), most gas station customers want quick and easy choices. A hot sandwich, a slice of pizza, a warm pretzel, or a cookie and coffee pairing are all high-margin decisions made in seconds. The easier it is to understand the offer, the more likely customers are to leave the island and walk inside.
Margins multiply inside the store, and the most effective operators make that journey irresistible. When visibility, perception, messaging, and product simplicity all support the experience, pump traffic becomes store traffic, and store traffic becomes profit.
The Nemco team has a comprehensive guide, The Convenience Store Opportunity, that we're happy to share with you. Click the button below to download it today.