Murphy USA Sees Foodservice as Key Initiative in QuickChek Integration

EL DORADO, Ark. — Murphy USA has a goal: ramp up its food and beverage offer. Its recent acquisition of QuickChek Corp. will go a long way to reaching that goal.

During Murphy USA's third-quarter 2020 earnings call on Oct. 29, President and CEO Andrew Clyde said the company was open to pursuing targeted merger and acquisition activity, particularly if it includes chains with existing at-scale food and beverage capabilities that could deliver immediate benefits and upgrade Murphy USA's existing operations, as Convenience Store News previously reported.

Less than two months later, the El Dorado-based retailer enter into an agreement to acquire QuickChek, the Whitehouse Station, N.J.-based convenience store chain that is well known in the Northeast market for its fresh food program.

The deal closed Jan. 29, becoming the first notable c-store M&A transaction of 2021.

"With QuickChek, we are well positioned to accelerate our strategic agenda, creating an even higher-quality income stream that is inclusive of a best-in-class food and beverage offer," Clyde said during Murphy USA's fourth-quarter 2020 earnings call, held Feb. 4. "Together, we can grow better, faster and stronger as our highly engaged teams share a passion for delivering excellence to our customers, our employees, our communities and our investors."

According to the CEO, the main strategic initiative going forward will be leveraging QuickChek's food and beverage platforms on "a fit-for-purpose basis for all formats."

Clyde acknowledged that there is less opportunity to bring these platforms to Murphy USA's kiosk locations — a concept the company is reducing by 5 percent a year through its raze-and-rebuild effort. However, he said there are opportunities with the remaining 50 percent of Murphy USA's portfolio.

"The 1,400-square-foot stores have a coffee program, have dispensed beverage, have a made-to-stock food and beverage offer. There are definitely opportunities there," he said.

And the most significant opportunities exist in Murphy USA's 2,800-square-foot convenience stores. "The real trick here is maintaining the capital program we have in place where we have permits and we're going to build the stores while thinking about what does the redesign look like on a fit-for-purpose basis," the chief executive explained.

"We're not going to have the full QuickChek world-class coffee program in that store. We're not going to have a kitchen in that store that's making made-to-order items, but we can absolutely benefit from the coffee program, the practices," he added. "As the former [QuickChek] CEO Dean Durling said, there's 100 steps to making a great cup of coffee and we need to add about 90. There will be opportunities to do that, as well as improving our grab-and-go food program."

Alongside the plans to enhance its foodservice offer, Murphy USA will also launch some branding or sub-branding efforts to let customers know about the change.

"Also, we've been working on our own with Core-Mark and other equipment providers on what a distinctive, unique-to-Murphy USA offer would be," Clyde said. "We believe not only that it is still appropriate for our business, but has legs within the QuickChek model as well."

The changes will not have immediate benefits in 2021, according to Clyde, but will set the foundation for accelerated growth in 2022 and beyond.

Murphy USA and its team of nearly 15,000 employees serve an estimated 2 million customers each day through its network of retail gas stations and c-stores in 27 states. The majority of Murphy USA's sites are located in close proximity to Walmart stores.