Murphy USA lets value take the lead

“We’ve seen the impact particularly in the northeast markets, where we’re seeing lower inflation for dining at home versus eating out, and that remains a challenge,” he said. “We’re also seeing an increase in promotional intensity (for quick service restaurants (QSR)), with many QSRs refocusing on value and competing per share in prepared foods and beverages, which are the top traffic-driving categories at QuickChek.”

The company’s value proposition and the upcoming launch of a new loyalty program are likely to strengthen Murphy’s competitive position, according to Clyde.

“Similar to (Murphy Drive Rewards) members, (QuickChek) Rewards members remain very active, shopping more frequently and with larger baskets,” he continued. “But one less purchase or trade-in adds up. With our commitment to great pricing, the upcoming launch of the new QC Rewards and other initiatives, we are well positioned to drive back that extra shopping and trade-in.”

In the snack area, customers continue to spend a lot of money on beer and salty snacks. “Not only do customers not want to give them up, but they are buying more of them because of our low price,” Clyde added.

In numbers

Murphy USA opened three new stores and reopened nine stores after demolition and remodeling in the second quarter. This brings the year-to-date total to six new stores, including a QuickChek store, and 11 stores after demolition and remodeling, which converted small kiosks into 1,400-square-foot stores.

The construction plan calls for 22 new branches, including three QuickChek branches and 25 demolition and new buildings. A further phase of construction for new branches is scheduled to begin in early September.

“To illustrate, demolition and new construction projects are generally easier to permit and complete than new stores,” said Galagher Jeff, executive vice president and chief financial officer. “We are excited about this program because it expands customer offerings, improves the look and feel of our stores and provides strong reinvestment returns.”

Murphy USA plans to increase new store openings in 2024, 2025 and beyond, according to Jeff. He notes that the company will reach its goal of 30 to 35 new stores this year, accelerating its business growth from 28 store openings in 2023.

Murphy USA reported net income of $144.8 million in the second quarter of 2024, up from $132.8 million in the same quarter last year. Adjusted EBITDA was $278.6 million, up from $257.1 million in the second quarter of 2023. The company cited higher total fuel contribution and higher total merchandise contribution as the main factors for the increase, partially offset by higher store operating costs.

Total retail sales increased by 0.6% in the quarter, while volume on a like-for-like basis decreased by 1.3% year-on-year. Total merchandise contribution increased by 4.7%.

Based in El Dorado, Murphy USA has more than 1,500 stores located primarily in the Southwest, Southeast, Midwest and Northeast of the United States. The company and its team of nearly 15,000 employees serve an estimated 2 million customers daily through its retail network in 27 states. Most of Murphy USA’s stores are located in close proximity to Walmart Supercenters. The company also sells gasoline and other products in stand-alone stores under the Murphy Express and QuickChek brands.