For many Americans, the final week of December means quality time spent with loved ones and joyous holiday celebrations. Fuel retailers, on the other hand, scrape their way through a period with the lowest fuel demand all year long. 

As a result of the business slowdown during the holidays and the colder weather that generally keeps more drivers off the road, we anticipated declines in sign prices from lower seasonal demand during the month of December. On the whole, December 2024 brought exactly the results we expected — and January brings renewed optimism for a new year. 

Read on for more detailed analysis, including a closer look at convenience store metrics and our predictions for the upcoming month.      

Last month’s data

Expected drops in fuel demand

As we explained in our last update, the year-end holidays bring a moderate uptick in household travel, but a larger decrease in business activity. The net result is a softening of fuel demand, which lowers sign prices for drivers. 

The typical fuel station saw its rack price for regular gas decline by just under 3 cents per gallon. Stations in the West experienced the largest drop, while the Midwest was the only region that saw increased rack prices month-over-month (but that increase of less than a cent is negligible).

On average, sign prices dropped even more than rack prices, benefitting drivers at the expense of retailers. The average station sold gas at 3.9 fewer cents per gallon in December compared to the month prior, with the average retailer making a cent per gallon less in profit.

Making sense of topline c-store metrics

As the sun set on 2024 and rose on 2025, many analysts gave their postmortems and made predictions for fuel prices in the upcoming year. While there is currently a lot of attention in that area, we want to check in on trends inside the convenience store. 

Placer.ai recently wrote about how foot traffic has grown long-term, despite a flattening over the past year. Since Upside has access to full transaction data — more than just foot traffic — we can provide a different perspective to address the same question.

First, the graph below shows that in December 2024, inside transactions increased by 0.2% over the past two years. While this might seem acceptable at face value, other measures of demand do not tell as rosy a story. 

In addition to plateaued traffic, we also see that consumers are putting fewer items in their basket overall. As a result, each day the average c-store in December 2024 sold 3.1% fewer items than they had in December 2022. This shows that consumers are becoming more picky in what they purchase.

To counter this soft demand, c-stores have been raising their prices, leading to an overall increase in receipt spending. Average daily c-store revenue has increased narrowly by 1% over the past two years; however, this has not been enough to keep up with the 6% inflation over that time. This means the true, inflation-adjusted daily revenue has experienced a 5% decline in the past year.

For c-store retailers, topline metrics don’t always paint a complete picture. Adjusting for inflation helps to add clarity to the situation, a necessary first step to mounting a response.  

Predictions and considerations

Renewed optimism as the calendar turns to 2025

Each year, demand generally tapers off following the end of summer driving season, decreasing through the autumn months before bottoming out as the calendar flips. The final week of December is the point at which fuel demand reaches its lowest lows throughout the year. January, then, is an optimistic time. We expect fuel demand to begin increasing in January, starting an upward trend that continues through the summer months.

Usually, an increase in demand means a subsequent increase in sign prices, but we don’t expect to see that this month. Weaker than expected demand in previous months means we’re seeing elevated gasoline inventories, and so the high supply should hold sign prices steady for now. Barring any external shock, consumers should expect to see consistent sign prices for the next few months, with increases starting in early spring.  

Potential tailwinds:

1. With the turn of the calendar, we’ve reached the end of the seasonal decline in fuel and c-store demand. From here, we generally expect growth from now into summer.

2. Despite minor dips in December, retail margins are still healthy. 

3. High gasoline inventories portend low sign prices, which increase demand.

Potential headwinds:

1. President-elect Donald Trump will take office in January, and he has outlined a plan for new tariffs on American imports. Such tariffs could lead to changes in rack prices and sign prices.

2. Winter weather disruptions could interfere with planned travel or refinery output.

Want a closer look at the data?

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