A convenience store looks like a margin-poor business because, on average, it is: net 2-6% of revenue. The skill is category mix. The same square footage earns 85% margin on soda and 1-2% on lottery tickets — so what you stock decides whether you survive.
The c-store cost stack
| Line | Range (% of revenue) |
|---|---|
| COGS (cost of goods sold) | 40-53% |
| Labor | 10-15% (keep under 15%; can drift to 30%) |
| Rent / occupancy | 4-20% (rural 4%, metro 20%) |
| Operating expense (all-in) | 53-76% |
| Shrink (theft + spoilage) | 1-3% of sales |
| Net profit | 2-6% |
Category margins — this is where profit lives
| Category | Gross margin |
|---|---|
| Soda / fountain | ~85% |
| Packaged beverages | 60-65% |
| Snacks | ~40% |
| Fresh food / prepared | 34-60% |
| Coffee / hot drinks | 34-60% |
| Tobacco | 10-15% |
| Lottery | 1-2% |
| Fuel (per gallon) | 2-5 cents |
Startup ranges
| Scale | Total opening range |
|---|---|
| Small independent | $50K-$150K |
| Full-scale store | $250K-$500K |
| Metro / fuel-coupled | $400K-$600K |
Shrink is a silent tax: at 1-3% of sales, shrink comes straight out of a 2-6% net. Tighten cash-handling, coolerdated rotation, and POS controls before you chase more traffic.
Sources (retrieved 2026-08-13): NACS convenience-industry financial benchmarks (gross margin, labor, shrink); POS and c-store operator guides citing category margins (soda 85%, tobacco 10-15%, lottery 1-2%); SBA and startup-cost summaries for c-store opening ranges and 12-24 month break-even.