Dive Brief:
- Murphy USA is testing a new proof-of-concept program aimed at improving earnings at lower-performing stores, the company said during its third-quarter earnings call on Thursday.
- The test, which focuses on improvements at Murphy’s forecourts, may begin as early as this week, Mindy West, Murphy’s chief operating officer, said in the call.
- This initiative comes as Murphy continues to accelerate its construction program, which includes increasing the number of raze-and-rebuilds as well as new-to-industry stores.
Dive Insight:
For the store improvement program, Murphy separated its locations into 30 clusters based on similar structural characteristics, West said in the call. It then looked at which factors it felt may account for the variance in performance among similar stores.
“Of those drivers, fuel sales influenced by dispenser health represents our largest theoretical upside,” said West.
The company plans to make changes to a small number of stores during the test before implementing a broader rollout. The test stores will let Murphy “assess what is really feasible at the store,” West said. The company did not outline what those changes would be.
West noted that while the company is keeping expectations conservative, it should have a better idea next year of how much of an improvement this program could offer.
The new test coincides with Murphy ramping up its store construction plans, Chief Financial Officer Gallagher Jeff said during the call.
Murphy is actively working on 29 new stores and 15 raze-and-rebuilds and has already begun building some of its 2025 stores. The company attributed part of this increase to sites getting through the permitting process with local governments faster than expected.
These construction plans have moved Murphy closer towards its goal of 50 new builds per year, multiple executives said in the call.
New Murphy stores outperform their older counterparts, Jeff noted in the call. Locations that were built in 2022 and 2023 sell 18% more gallons of fuel and 27% more in merchandise than the company’s network averages.
