Dive Brief:
- Murphy USA will shift its attention this year to opening new-to-industry convenience stores compared to the raze-and-rebuild focus it used in 2024, leaders said during the retailer’s fourth-quarter earnings call on Thursday.
- Last year, Murphy opened 32 NTI sites and remodeled 47 locations. Although those numbers were in line with the company’s guidance heading into 2024, Murphy underdelivered against its schedules for these sites, which hurt fuel and merchandise sales due to fewer store months in operation, President and CEO Andrew Clyde said.
- With more emphasis on organic growth, Murphy intends to open up to 50 new-to-industry c-stores and remodel up to 30 locations in 2025, leadership said and as outlined in the company’s earnings report.
Dive Insight:
Clyde said that Murphy’s new stores in 2022 and 2023 were on schedule and, to date, have performed well in terms of merchandise and fuel sales. However, he added that Murphy experienced delays for some of its new stores in 2024, which threw off its performance and financial goals. This, in turn, can impact the performance cycle for new stores moving forward, Clyde told investors on the call.
“When you don't hit the store months that you expected in the prior year, you're not as far along in the ramp in the current year to achieve those benefits that you wanted,” Clyde said. “It's not about hitting the number [of new builds and rebuilds] for the year — it's about hitting the store months when you wanted to hit them, so that in the next year, they're at the ramp point that you expected.”
That’s why Murphy is cutting back on the number of remodels it intends to do this year. During the call, CFO Glagher Jeff said the company is “taking a more measured approach in 2025” as it plans for no more than 30 of these projects to ensure it supports new store development.
Murphy is ahead of schedule with new builds for the year, with 17 already under construction and four already open, Jeff added.
Clyde said that despite the “disappointing” year, Murphy feels confident about its new store pipeline and the markets that it’s bringing stores into. However, the next few years will be spent making up for the “collective misses” Murphy experienced last year, “to be able to get right in line with our 2028 EBITDA goals,” Clyde said.
