In 2025 the average price of a gallon of gas fell from $3.30 to $3.11. Gallons sold actually went up, by about half a percent. Fuel revenue fell anyway, 5.4%, from $501.9 billion to $476.3 billion, because you cannot sell your way out of a price drop when volume is flat.
That is one line in the NACS State of the Industry data released in April 2026, and on its own it is not alarming. Fuel has always been the volatile half of the business. The line underneath it is the one worth sitting with. Inside sales grew 1.7% to $341.2 billion, which reads like good news until you look at how that growth happened.
Customers spent more and stores kept less
Total industry transactions fell 3.0% in 2025. Fewer visits. The average basket rose 24 cents, so the customers who did come in spent a little more. Basket profitability fell 8 cents.
That is the whole problem in two sentences. People spent more per trip and the store kept less of it. Cost of goods and operating expenses absorbed the increase and then some. NACS put direct store operating expenses at just under $166 billion for the year, up 4.2%, and 4.2% was the smallest annual increase since the pandemic. Measured from 2021, operating expenses are up 23.3%. Card fees alone reached a record $21.3 billion, and $4.6 billion of that was charged on taxes the store collected and handed straight to the government.
Then there is labor. The industry employs about 2.75 million people, roughly 20 per store, at just over $15 an hour. Turnover is still running above 100%. Every departure is a rehire, a retrain, and a stretch of weeks where the person at the register is learning the job on live transactions.
None of that is a crisis. It is a cushion getting thinner. And a thinner cushion changes the math on something most operators still think of as a fixed cost of doing business.
Shrink comes out of gross profit, not out of sales
This is the part that gets misread. When a case of energy drinks leaves without being paid for, the store is out the cash value of that case. But the hole it has to fill is a gross profit hole, and gross profit is only a slice of sales.
Use your own margin, because you know it and we do not. If you keep 30 cents of gross profit on a dollar of inside sales, a $100 loss takes roughly $333 of additional sales to make back. Not $100. That is arithmetic on your own number rather than a statistic we are quoting, and it is why the same dollar of shrink is more painful now than it was four years ago. The sales you need to cover a loss are exactly the sales that got harder to get: transactions are down 3.0% and the profit on each basket is smaller than it was.
Foodservice makes this sharper rather than softer. It is now 28.5% of inside sales and close to 39% of inside gross profit, which means a large share of the profit in the building sits in the category with the shortest shelf life and the most handling. Waste, sloppy portioning, and unrecorded consumption behind the counter are shrink too, and they land on the highest margin dollars you have.
The loss moved somewhere a camera cannot follow it
A second shift is happening at the same time. The NRF's Impact of Theft and Violence 2026 survey, covering 66 retail companies and 143 brands, was reported this week, and the surface reading is encouraging: shoplifting incidents fell 12.4% and merchandise theft fell 8.1% against the prior year.
Look at what rose. Phone scams up 69%. Loyalty fraud up 51%. Gift card fraud up 42%. Organized retail crime incidents up 40%, repeat offenders up 50%, and walkout and pushout theft up 37%.
Those two lists describe different kinds of loss. The kind that fell is the kind a camera was built to catch: a hand, an aisle, a jacket. Most of what rose does not look like theft on video at all. A drained gift card is a transaction. A hijacked loyalty account is a transaction. A refund with no customer and no merchandise is a transaction. Point a camera at the register while one of those happens and you record a person standing at a counter, behaving normally.
One more detail from the survey is worth holding onto: 63% of retailers say they report fewer than half of their theft incidents to law enforcement, usually because the dollar amount is too small to meet a felony threshold. The small repeated losses are the ones that go uncounted. Small repeated losses are also exactly what a thinner margin cannot absorb.
What you can measure between now and the next count
An annual physical count will tell you the size of the hole in about eleven months. That was tolerable when the margin had room in it. It is not a plan now.
What replaces it is not another camera and not another report. It is joining the systems the store already has, so a transaction can be checked against what actually happened in the room. That is the work we do at Argus: crossing cash with point of sale with cameras with labor, continuously, so an operator gets a daily read instead of an annual autopsy. A void with no customer at the counter shows up in that join. A gift card activation with no matching tender shows up. A drawer that comes up short at the end of a shift, mapped against who was scheduled on it, shows up. None of those are visible in any one of the four systems on its own.
Three things you can do this quarter without buying anything:
- Track voids, no sales, and refunds per employee per shift, not per store per month. The pattern lives at the employee level and vanishes in the store average.
- Reconcile the drawer against scheduled hours, not just against the register total. A shortage that follows one person across shifts is a different problem from a shortage that follows a busy hour.
- Treat gift card and loyalty activity as loss surface, not only as marketing. Those are two of the fastest growing categories in the survey, and almost nobody watches them from the loss side.
The 2025 numbers do not say the business is failing. Inside sales grew again and expense growth actually slowed. They say the room for error got smaller, and a smaller room for error changes what a dollar of loss is worth. That is worth measuring daily, whoever you end up measuring it with.
Argus is in private beta with convenience, gas station, and grocery operators. If you want to see what that join looks like on your own stores, talk to us or email business@useargus.co.