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Consumer confidence remains slightly below average. | Shutterstock
How’s business? I recently asked a prominent retailer.
Hmmm, she sighed. Then after a brief pause, she elaborated.
“Meh.”
Traffic was down through the year’s first half by 1.5% year over year, mobile rewards were doing ok but not great, supplier deals were getting fewer and fewer, leaner and leaner.
Why do you think that is? I probed.
“I think we’re in an economic malaise,” she said. “Things aren’t bad, but they aren’t great. We’re growing, but truthfully our growth is through new-store construction and new markets; not so much on same-store sales. Those are down, but down less than our competition.”
As I write this column in the first days of August, national economic data is bearing out what this operator and countless others are experiencing.
Consumer confidence remained slightly below average, with The Conference Board’s monthly tracker for assessment of current market conditions down modestly through July but with consumers a bit more optimistic about the back end of 2025.
Perhaps more ominous is that the job market has weakened each of the first seven months of this year, with nearly 1 in 5 consumers indicating that jobs were hard to get, the board reported.
And while gross domestic product improved in second-quarter 2025, new job creation is alarmingly soft. In July, non-payrolls growth totaled 73,000 for July, below the Dow Jones estimate of 100,000 and well below the 114,000 jobs created one year earlier.
More disconcerting, new jobs reported in May and June were revised downward by a whopping 258,000, yielding a paltry 33,000 combined.
In conversations with over a dozen retail leaders, a growing concern is being expressed from many who had hoped that, for nothing else, President Donald Trump would strengthen the economy. What are these executives asking for today?
- Chill out on tariffs. Stop treating tariffs as an economic sledgehammer aimed at punishing critical trade partners. Many of the manufacturing jobs lost in the U.S. are never coming back. And taxing countries by 15% to 35% or more will simply add considerable cost across the supply chain, meaning higher construction bills, while also driving higher out of stocks.
- Cool it with deportations. There’s widespread agreement that the immigration system is shattered and that the borders under Joe Biden’s administration were pathetically porous. Trump has successfully curtailed illegal immigration. But rampant deportations, especially those targeting otherwise law-abiding, long-time illegal residents who contribute to the labor and manufacturing force, is both undercutting the labor pool and, more vitally for c-store operators, crushing performance in high Hispanic markets.
“As a chain, we are having an okay year, but in some markets with large Latino populations, sales are down 8% to 10% because even those who are legal are afraid to go out at risk of being arrested by ICE,” one Southern executive confided.
This conversation is not new in some ways, but very new in others.
The economic monotony has hummed in recent years, punctuated by occasional modulations. But some new factors are casting a level of fresh uncertainty.
Fuel margins. Once soaring into the 40- and 50-cent heights, per-gallon profits are now hovering between the mid 20 to low 30 cents. With year-over-year fuel consumption lagging between 3% and 4.5% month-over-month, don’t count on a surge in fuel margins this year.
Salvation?
However, one tool many operators are exploring more assiduously is artificial intelligence. Where can generative AI save money or even elevate certain revenue streams?
I asked ChatGPT that question. Its initial response was 345 words, too long to shoehorn into this column. But here are some highlights that I have paraphrased for space reasons:
Cost-saving applications
1. Inventory optimization: This includes demand forecasting for seasonal and market trends; automated restocking and waste reduction.
2. Loss prevention: AI-powered surveillance systems to attack theft detection, including internal theft..
3. Other savings: This includes HVAC optimization, labor scheduling and real-time supply-chain management.
Revenue-generating applications
1. Personalized marketing: This includes rapid-fire customer purchase history and empowering greater targeted, real-time promotions via text-messaging or loyalty apps.
2. Dynamic pricing: Price adjustments at different points of the day to leverage both peak and slow times.
None of this is simple or guaranteed, but according to ChatGPT, “By strategically implementing these AI solutions, convenience stores can simultaneously reduce operational costs and create new revenue opportunities, ultimately improving profitability in an increasingly competitive market.”
Perhaps it’s time to give some of these ideas a try.
Mitch Morrison is vice president of retailer relations at Informa Connect. Reach him at mitch.morrison@informa.com.
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