Pepsi shares gas price warning for 7-Eleven, convenience stores

When gas prices go up, consumers generally shift their spending away from other areas because, in many cases, driving isn't optional.

"Faced with higher gasoline bills, some households may be inclined to trim their spending on other things. In the April Consumer Checkpoint, we discussed how some areas of discretionary spending, such as durable goods (e.g., furniture) and food services (e.g., restaurants), were candidates for a trim. Alongside this, previous sharp rises in gas prices even appear to have led to a decline in the share of spending on groceries, perhaps as households trade down," according to a Bank of America report.

Consumers have traditionally made cuts when gas prices cross certain levels.

"Historical Black Box Intelligence analysis reveals a harsh industry reality: restaurant traffic historically declines once the national average for a gallon of regular gas surpasses $3.50," according to Black Box's April 2026 Out of the Box.

That's a level U.S national average gas prices have been over since March, according to AAA, and PepsiCo has shared some sales news that should be taken as a warning for 7-Eleven and other convenience store chains.

PepsiCo sees weakness in convenience stores

PepsiCo CEO Ramon Laguarta shared troubling sales news during his company's second-quarter earnings call that shows where Americans have been cutting back.

"In the U.S., we're seeing the consumer changing behaviors, basically an acceleration of some of the behaviors we saw in the past. Probably some channels, more the impulse channels, have been impacted, where there is more of a correlation with the price of gas. [In] certain convenience stores and some other independent [stores], we're seeing a slowdown of the conversion of traffic into purchases," he shared.

Whether that continues depends on gas prices, which, he noted, PepsiCo doesn't control. The company, however, has been working with its partners to address the weakness.

"We continue to invest in affordability. In those particular channels, we're working with our customer partners in solutions to convert more of the traffic in the store, bundles, linking to meals, solutions to address that particular channel," he added.

The problem with bundles, of course, is that while they save money, they also cost more money than individual items.

Food and drink sales are key for convenience stores

When a 7-Eleven sells you gas, it makes a small profit. If it gets you to buy a Slurpee, a roller dog, or a candy bar, the margins are much higher.

For convenience stores in 2025, fuel represented 65% of total sales dollars but only 38.8% of gross profit dollars, according to data from the National Association of Convenience Stores (NACS).

"Foodservice once again led in-store sales, accounting for 28.5% of the total. The category has grown significantly over the past two decades, up from 11.9% in 2005. Its impact on profitability is even greater, contributing 38.9% of in-store gross profit dollars in 2025," added the NACS.

Foodservice includes prepared food, commissary items, and hot, cold, and frozen dispensed beverages. Prepared food - pizza, chicken, burgers, sandwiches, wraps, and salads -remains the largest segment, representing 73.9% of foodservice sales, up from 66.4% in 2021.

RTM Nexus CEO Dominick Miserandino thinks it's not about actual budgets, but more of how people feel when filling up their car.

"Just to the current state, gas prices feel high. And when a consumer is pumping his gas and seeing how high it gets, they don't feel as if they have that expendable income for a quick snack at that point," he told TheStreet.

Gas prices remain volatile

Consumers remain wary of gas prices because while they have come down from recent highs, they have been climbing again.

The national average for a gallon of regular gasoline went up 10 cents since last week to $3.94, AAA reported on July 16.

"Instability along the Strait of Hormuz is contributing to the increase at the pump and pushing crude oil prices toward $80 per barrel. Most states are still averaging less than $4 per gallon," according to AAA.

Prices, however, have not fallen to a level where consumers stop being wary.

"Earlier this year, the national average remained in the $4 range all of April and May and most of June. Last time the national average was $4 or above was on June 17 when it was $4.02," added the travel organization.

A quick look at gas prices:

• July 16 national average: $3.943
• One week ago: $3.846
• One month ago: $4.044
• One year ago: $3.160

PepsiCo wants to help its retail partners offset higher gas prices with better deals on snacks.

"The way we're trying to increase the incidence of purchase in that channel is through bundles and some other incentives for purchase that we're actually partnering with our customers across the country. That we see the benefit when we have good offers and bundles, beverages and foods, or foods or snacks and foods, we see that being a great accelerator of the performance of the different customers," Laguarta added.

Related: Costco makes a silent gas change members will love

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This story was originally published July 17, 2026 at 7:37 AM.