Retail Industry Outlook: 78 % of Small Businesses Believe They’ll Remain Open Over the Next 12 Months

Running a small business in the food and beverage retail space—whether it’s a corner store, bottle shop, or neighborhood market—has never been simple. Operators today are juggling more challenges than ever before. Many are training employees, restocking inventory, and managing vendor no-shows, all before lunch. And yet, in the face of constant uncertainty, they remain remarkably resilient. 

A recent Toast survey found that 78 % of c-stores, bottle shops, and grocery stores believe they’ll remain open over the next 12 months, and 32 % are likely to expand or open new locations, signaling both confidence and ambition in the future.

In this article, we’ll break down the top pain points small food retailers are facing today, from inventory management to marketing, and explore strategies to overcome them. Staying open is one thing. Thriving is another.

Top business pain points from food and beverage retailers

Food and beverage retailers are facing a complex mix of challenges in 2025. Marketing has emerged as the top concern, cited by 19% of respondents as their biggest pain point. From running effective promotions to building customer loyalty in a competitive market, many operators are feeling the pressure to make every marketing dollar count.

Right behind marketing ranks supplier and vendor management (17%), highlighting another major hurdle for operators: maintaining consistent inventory amidst rising costs and delayed shipments.

Security, inflation, inventory management, invoicing, data management, and line speed all fall within a tight 15-16% range. This suggests that while no single issue dominates across the board, operators are juggling a lot at once, with pressure coming from all directions.

Labor-related issues like compliance with regulations and employee training (both at 15%) round out the list, emphasizing how tight labor markets and increased oversight are reshaping day-to-day operations. Today's food and beverage retailers are not dealing with one big problem. They’re navigating many at once, and the margin for error is thinner than ever.

But small retailers like Providore Fine Foods in Portland show us that while these challenges are real, they’re also navigable with the right mindset and systems in place. 

Build meaningful moments, not just marketing campaigns

Providore Fine Foods keeps its marketing stripped down and strategic. Instead of over-investing in fleeting trends or big-budget campaigns, they focus on what resonates: local NPR ads and word-of-mouth.

“Our marketing is actually extraordinarily simple,” co-owner Kaie Wellman explains. “We have ads that run on our local NPR station. That has been our most powerful way to speak to our audience. I’m not a huge believer in some of the more traditional ways of marketing. I think word of mouth is always the most powerful.”

In an era of algorithm fatigue and constant online noise, Kaie and her team have leaned into authenticity. It’s not about chasing clicks; it’s about creating connections. That philosophy extends beyond ads and into the four walls of the store itself.

“When people come into the store, there’s kind of a wow factor. It doesn’t look really at all like a grocery store.”

Retailers can take a page from this playbook by focusing on what makes their Brand distinct and letting the customer experience do the talking.

Streamline your technology to simplify vendor management

Managing suppliers can be one of the most time-consuming aspects of running a store. Between chasing down payments, managing inventory, and keeping multiple vendors aligned, it’s easy for small teams to become overwhelmed. As one respondent to Toast’s survey put it:

"I deal with hundreds of vendors, and if I had to do all of that, I’d have no time to do my own job. It’s just back-end paperwork."

Providore’s approach is proof that specialty markets can reduce friction by integrating vendor operations into a unified system.

This streamlined setup not only saves time. It enables creativity. With less administrative burden, the team can focus on curation, hospitality, and product innovation. Shoppers can browse shelves with a glass of wine, fill their baskets with Little T Baker’s goods, or relax with a cheese board while their different purchases flow through the same centralized POS system.

“It’s a beautiful hub of eating and drinking in community,” Kaie adds.

When done right, vendor management technology doesn’t just make operations smoother. It powers experiences that keep guests coming back. 

Educate customers on real costs

Inflation continues to challenge retailers across the board, especially those working with premium or imported goods. Rising prices are often met with consumer skepticism, but the costs are very real.

“We’ve seen total obliteration of crops—olive oil, chocolate, coffee… so yes, costs go up,” says Kaie Wellman

Between climate change, tariffs, and supply chain disruptions, pricing today reflects more than just markups. Retailers like Kaie are using these moments to try to educate shoppers about where their food comes from and what it actually costs to produce responsibly.

Whether it’s small-batch imported cheese or locally made pasta sauce, customers are more likely to pay a premium when they understand the story and sustainability behind a product. According to a Toast survey, over 72% of respondents are willing to pay more for specialty food and beverage products. 

Retain great people by investing in culture and compensation

Hiring and retaining staff continues to be a major pain point for small food retailers,  and Providore Fine Foods is no exception.

“Staffing is always difficult. Yes, always,” says Kaie Wellman. “I imagine for anybody in our industry and in the restaurant industry,  it's always a challenge.”

Despite the difficulty, Kaie says Providore is proud of its low turnover rates and long-term team loyalty.

“A solid 80% of the people who come to work here stay for at least a year, if not more.”

A unique compensation model that reflects the true value of the work has been instrumental. Providore pays well and uses a tipping model that’s unusual for specialty grocers. This model emerged during the pandemic and has continued thanks to strong team support. At their specialty shop, customers can actually tip the staff at checkout. 

“We have areas in the store that are absolutely tip-worthy, from our world-class cheese counter to barista-made drinks and wine service. These are experiences people usually tip for. We just try to remind people: there’s no expectation. But if you had an amazing experience and want to show appreciation, it’s there,  and it goes to the entire team.”

Alongside a solid base wage, Kaie believes these tips help team members feel valued and that helps them stay.

“It makes it more viable, especially in an expensive city like Portland. But more than that, it makes people feel appreciated. As they should.”

Of course, adding tips isn’t a fit for every retail environment. But Kaie’s experience shows that offering fair pay, showing appreciation, and fostering a strong team culture can go a long way in reducing turnover.

Focus on the things you can control 

It comes as no surprise that small retailers are still feeling the aftershocks of pandemic-era disruptions.

“Supply chain has been a hot mess since the pandemic. It gets better for a moment, and then something else gets thrown on” says Kaie Wellman

From global climate challenges to unpredictable tariffs, the entire supply ecosystem is under pressure.

“We’re on a merry-go-round with tariffs and supply chain issues. We’re just waiting to see what happens next.”

For operators like Kaie, the answer isn’t in trying to control every variable. It’s about resilience and focus. Providore does this by centering their offerings on things they can control, such as:

• In-house-made offerings like focaccia, pasta, and dips

• Partnerships with hyperlocal producers and vendors 

• Products with proven quality

By investing in dependable products and suppliers, small retailers can build stability and customer trust even in a chaotic macro or micro economic environment. 

Where do small business owners go from here?

The retail landscape may be tough but it’s full of opportunity for those who embrace experience, community, and adaptability. Kaie Wellman shows us that thriving as a small retailer isn’t about chasing trends or growing fast. It’s about protecting your vision, prioritizing quality, and creating a space that customers want to return to.

Sometimes, the best way to combat complexity is to keep things simple and customer-centered.

Methodology

Toast conducted a blind survey from April 18, 2025, to May 13, 2025, of 492 respondents 18 years old and older who are based in the US, and are current decision makers at a convenience store, bottle shop, or grocery store that has 16 or fewer locations. Respondents were not made aware that Toast was fielding the study. Using a standard margin of error calculation, the margin of error on average is +/- 5%.