If you’re running a gas station, you already feel the squeeze from higher supplier bills, pricier payroll, and customers who think twice before topping off. Many operators, as Nick Kambitsis has observed, are scrambling to protect slim fuel margins by treating the forecourt and the store as one business rather than two separate profit centers. The result? Smart owners are leaning into pricing, product mix, and operations to keep the lights on and the pumps turning.
What “margin” really looks like at the pump
Let’s start with the numbers. For many U.S. retailers, gross fuel margins historically sit in the ballpark of a few dozen cents per gallon, not percentages customers expect when they see today’s sticker shock. Over the last several years, retailer gross margins have averaged roughly $0.27 per gallon, or about 10% of the pump price, and that figure masks a wide range of circumstances from region to region. Those pennies are the thin line between profit and loss when inflation hikes costs for labor, utilities, and goods.
Margins are not only small, they’re volatile. Wholesale crude and refined product prices ripple through the system and, combined with local competition, can make it hard to pass every increase through to customers. State-level breakdowns show margins themselves include distribution, taxes, and retailer markups, so the story at any one station is a tangle of national markets and local realities.
How inflation tightens the screws
When inflation rises, everything connected to your station gets more expensive. Fuel cost is the headline, but labor, energy to run coolers and lights, packaging for grab-and-go food, credit card fees, and even maintenance parts follow. That combination eats into the already-thin per-gallon margin and pushes owners to choose between hiking pump prices (and risking traffic) or absorbing the cost and watching profit evaporate.
We’ve seen the downstream effect play out across the sector: total fuel revenues and volumes shift year to year as average pump prices and consumer behavior change. For example, industry reporting shows fuel revenues can drop notably in a year when pump prices move or customer patterns shift. Being nimble matters.
Quick, practical levers owners can pull
You don’t have to be a macroeconomist to respond; here are practical, tested moves that work in the real world.
- Fix the math: track “all-in” margins:
Know your break-even per gallon after wages, credit-card fees, rent, and shrink. Retail specialists recommend building an “all-in” margin sheet so every pricing decision is informed by the true cost of doing business. That level of transparency helps you decide when to nudge pump prices and when to lean on store margin.
- Make the store pull its weight:
Fuel brings people; the store makes money. Upsell coffee, hot food, and fast-service items that carry higher margins and shorter payback. Promote combo deals, loyalty discounts that encourage repeat visits, and premium grab-and-go options. Reconfiguring product mix often yields faster margin gains than trying to squeeze pennies off fuel.
- Use smarter pricing, but be strategic:
Dynamic pricing tools let you react to wholesale shifts and local competition without constant manual updates. Tiered pricing, time-of-day specials, or membership/subscription discounts for regulars can stabilize revenue and smooth demand swings.
- Control operating costs:
Energy efficiency, LED lighting, programmable thermostats, and better refrigeration maintenance cut utility bills. Small investments often pay back quickly, especially when inflation is pushing monthly expenses higher. Also audit supplier contracts for better terms or bulk-buy opportunities.
- Hedge and diversify:
Some chains and independents use forward contracts or supplier hedges to lock in fuel costs; others diversify revenue through car washes, quick-serve food, and ev-charging fees to spread risk. Building modular plans, adding EV chargers or a small kitchen incrementally, gives you room to adapt without overspending.
Bigger-picture moves for resiliency
If you run multiple sites or are thinking long-term, there are scale plays that reduce exposure to inflation’s swings. Centralized purchasing, consolidated labor scheduling systems, and cross-site loyalty programs let you command better supplier pricing and optimize staffing. Investing in energy generation (solar canopies) or battery backup can also reduce utility exposure and, in some markets, qualify you for incentives that offset upfront costs.
Policy matters too: regional fuel taxes, state rebate programs, and federal credits can change the math quickly. Keep an eye on local programs that help with energy upgrades or infrastructure investments they’re often the quickest route to meaningful savings.
Communication is an underrated tool
Customers notice price moves. Transparent signage explaining why prices change, loyalty offers that soften increases, and staff trained to explain value in the store help maintain trust. In tight markets, reputational capital keeps traffic steady even when prices tick up.
Where to start if you only have time for one thing
If you can only tackle one initiative this quarter, make the store conversion your priority. Improving in-store margin density through better product mix, streamlined foodservice, and loyalty incentives typically moves the needle faster than any single fuel-pricing tactic. It also gives customers a reason to spend more per visit, which cushions fuel margin pressure.
A closing note: small changes add up
Inflation isn’t just a headline; it’s a constant operational force that changes the calculus of every gallon sold. But owners don’t have to be helpless bystanders. By clarifying real costs, leaning into higher-margin offerings, tightening operations, and using pricing tools where appropriate, station operators can protect margins and even grow through turbulent times. With more than 120,000 convenience stores selling motor fuels nationwide, small, smart plays at each site add up to big resilience for the business as a whole.
Inflation reshapes the landscape, but it also clarifies priorities. Stay pragmatic, measure relentlessly, and treat the forecourt and the store as partners. That’s the playbook that keeps pumps flowing and profit intact.