Dive Brief:
- Murphy USA intends to add between 30 and 35 new convenience stores to its network this calendar year after President and CEO Andrew Clyde said during the company’s earnings call on Thursday that the company was “disappointed” in the pace of its new builds in 2023.
- The c-store retailer also plans for between 35 and 40 raze-and-rebuilds this calendar year, in addition to remodeling the interior of about 50 locations, Clyde said. Last year, Murphy USA added 28 stores to its network and completely rebuilt 31 c-stores.
- Organic growth is Murphy USA’s “highest priority” when it comes to expanding the business over the next five years, Mindy West, executive vice president and chief financial officer, said during the earnings call. The company had previously unveiled plans to build 500 new c-stores by 2033.
Dive Insight:
When asked on the call about the hurdles Murphy USA faced regarding new stores in 2023, Clyde pinpointed a “variety of issues” across permitting, labor and other delays.
“We've had stores where we've expected utilities to hook up and you wait a month or longer for the utilities to show up — it's very frustrating to say the least,” Clyde said, noting that other companies in the industry faced similar hurdles.
Murphy USA plans to prevent similar issues this year through building its pipeline faster, Clyde said. This means loading more stores into the company’s queue while expecting possible setbacks or delays, Clyde and West said.
“This means we can potentially put more stores into service in 2024 or get a head start on 2025,” West said.
Adding between 30 and 35 new stores — including up to four QuickChek locations — this year will cost Murphy USA over $300 million, West said.
Murphy USA also plans to renovate 50 of its 2,800-square-foot locations, Clyde said. Work on these stores will include installing queue lanes, adding new cooler facings and improving and consolidation these locations’ food and beverage offerings based on data gathered at QuickChek locations, Clyde said.
The company piloted remodels at nine locations last year, which garnered positive results.
Inside the store, Murphy USA’s merchandise dollars increased 4.6% on average unit margins compared to this time last year. For the full year, merchandise contribution dollars grew 4.7%, according to the company’s earnings report.
El Dorado, Arkansas-based Murphy USA operates more than 1,700 c-stores in 27 states, including 1,577 Murphy USA and Murphy Express locations and 156 QuickChek stores.
