Dive Brief:
- Murphy USA plans to build at least 500 new c-stores over the next decade as the company continues to prioritize “organic growth,” Andrew Clyde, president and CEO, said during the company’s earnings call Thursday.
- The El Dorado, Arkansas-based retailer opened 36 new stores and completed 32 raze-and-rebuilds last year, and expects up to 45 new stores and up to 30 raze-and-rebuilds in 2023, according to its earnings report.
- Murphy USA is also undertaking a series of investments — including the redesign of its stores and targeted advertising — to create more of a competitive advantage moving forward, Clyde said on the call.
Dive Insight:
Despite the “outstanding” year Murphy had in terms of growth, the company was forced to deal with increasing operating expenses. Specifically, total store and other operating expenses were over $149 million higher last year than in 2021, mainly due to higher payment fees and spending more on employee expenses and store maintenance, according to the earnings report.
Murphy expects these expenses to decelerate in 2023 as the company further integrates QuickChek — the c-store chain it acquired in 2021 — and as inflation begins to cool off, Clyde said on the call.
“Even with the cost inflation that we are having, this is an attractive time to build stores,” he said.
Redesigns of Murphy USA stores won’t include a kitchen, Clyde said on the call. Instead, enhancements in those locations will focus on creating a layout that’s optimal for the customer and employee experience and overall traffic flow, he noted.
“The team has gotten incredibly good at resets within the same fixture layout, but how might you lay things out differently in terms of traffic flow, while making it easier for the store operator?” Clyde said.
Besides store redesigns, Murphy is taking on a “digital transformation” to improve the reach and effectiveness of its Murphy Drive Rewards loyalty platform, Clyde said on the call. Murphy plans to leverage customer shopping habits and transaction data to customize its offers and trigger more upselling opportunities, as well as optimize pricing and assortment.
“These learnings and capabilities will inform a redesign of the QuickChek loyalty program to increase brand awareness and attract new customers,” Clyde said.
Murphy USA operates c-stores and gas stations in 27 U.S. states, with the majority of its locations adjacent to Walmart stores.
