Health is wealth for the convenience channel

Canada’s convenience and gas channel is at an inflection point. After years of steady performance driven by tobacco, and immediate consumption snacks, growth has stalled. Total tracked sales are essentially flat over the latest 52 weeks, declining slightly by -0.1%. At the same time, rising gas prices are expected to further pressure traffic. For a channel built on frequent trips and impulse purchases, these dynamics are forcing operators to rethink growth strategies. Increasingly, the path forward lies in aligning with evolving consumer expectations, particularly around health and wellness.

Core categories are under pressure

Performance across key categories underscores the urgency for change. Tobacco, which represents more than 42% of total channel sales, has declined by nearly -7% year over year. Traditional impulse categories are also losing momentum: Salty snacks are down -4%; candy has fallen -7%; and prepackaged sandwiches have declined by -9%.

There are pockets of growth: Beer is up 27%; energy drinks have increased 16%; and liquor has grown by more than 100% from a smaller base. However, these gains are not widespread enough to offset declines across the broader assortment.

The implication is clear. Relying on legacy categories is no longer sufficient to drive growth. Sustained performance will require a more diversified and forward-looking approach to assortment.

Health intent strong but execution remains challenging

Health and wellness have become a central priority for Canadian consumers. More than half are actively trying to improve their health, six in 10 are focused on weight management, and 76% are concerned about future health issues. This reflects a meaningful and sustained shift in mindset.

Despite strong intent, barriers remain. Cost is the most significant obstacle, with 59% of consumers saying healthier options are too expensive. Time constraints affect 24% of shoppers, while 23% report difficulty finding healthier choices.

These barriers are highly relevant for the convenience channel. Convenience retail is well positioned to address time and accessibility, but success will depend on doing so without introducing added cost burdens. Healthier options must be easy to find, simple to understand and seamlessly integrated into existing shopping missions.

Functional nutrition Is moving mainstream

Consumers are not only thinking about health. They are actively changing behaviour. Diets are shifting toward higher intake of protein, fibre, fruits and vegetables, while reducing sugar, sodium and highly processed foods. Protein has emerged as a particularly strong driver of demand, with 48% of Canadians actively seeking high protein options.

This shift is beginning to appear in channel performance. The energy and nutrition category is growing at 4%, even as many traditional snack categories decline. However, not all better for you segments are benefiting equally. Categories such as nuts, seeds and portable healthy snacks continue to struggle, suggesting that availability, visibility and merchandising remain barriers.

For retailers, the opportunity lies in closing this gap. Expanding assortments of high protein snacks, low-sugar beverages and functional products, while integrating them into core merchandising spaces, can unlock incremental growth.

Front of pack labelling will accelerate change

Health Canada’s front of pack nutrition labelling is expected to further accelerate health driven behaviour. Awareness is already high, with 77% of Canadians familiar with the labels, and early indicators show declining consumption of products high in sugar, sodium and saturated fat.

This is especially significant for convenience retail. A large share of top selling products may trigger front of pack warnings. Data shows that 29% of food and beverage sales exceed sugar thresholds, while 31% exceed sodium limits.

In the near term, this may create pressure on certain high velocity items. Over time, it also creates a clear opportunity to evolve assortments. Retailers that introduce compliant alternatives and guide shoppers toward better choices can stay aligned with both regulation and consumer expectations.

From traffic driver to value driver

The channel is navigating a period of structural change. Flat sales, declining core categories, and external pressures such as rising fuel costs are reshaping the landscape.

Health and wellness represent one of the most compelling avenues for renewed growth. By diversifying assortments, simplifying the path to healthier choices and aligning with evolving consumer needs, retailers can reposition health as a meaningful value driver.

Those that move quickly and thoughtfully will not only offset current headwinds but also strengthen long term relevance. As traffic patterns become less predictable, offering convenient and better-for-you solutions may be the key to unlocking the next phase of growth.