Murphy USA Sets Its Sights on 'More'

This one word has multiple meanings, according to Clyde.

"When we look at our most loyal customers through the lens of our loyalty data, what do we see? First, we continue to get more from the same customers," he said. "When we look at a large panel of customers who've been shopping with us every month since 2019, we see that they are spending 50% more at Murphy USA in 2023 than they were in 2019 — about $177 per month."

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The company is also getting the same amount from more customers. New loyalty members who visited for the first time in 2023 are making the same frequency of trips as the most loyal cohort from 2019, or about five transactions per month.

The key is that they are spending at higher levels and shopping more of the store, with 28% of these customers purchasing fuel, tobacco and nontobacco each month.

"In addition, we're getting more from our existing stores," Clyde said. "As we continue to build on our history of lowering our fuel breakeven margin requirement and improving our coverage ratio, new initiatives are helping us maintain that trajectory."

He pointed to upsell suggestions implemented on touchscreens at the company's QuickChek stores. Early pilots indicated that uptake of suggested-sell items more than doubled. Additionally, creating personalized offers through machine learning initiatives is capturing more share of wallet from the same customers. 

"Same initiatives and investments, they allow us to achieve more with less," Clyde said. "Last year, we piloted a more sophisticated demand forecast and production planning tool at QuickChek stores. This initiative has resulted in driving a larger basket with better availability of items while also improving labor scheduling accuracy. In other words, doing more with less staff hours."

Murphy USA is now using the same demand forecast to finetune its labor scheduling.

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"More" also applies to Murphy USA's store count. The company added 22 new convenience stores to its Murphy-branded network last year. Within the last three years, it added 74 new Murphy banner stores and their average gallons sold are nearly 20% higher than the network average.

During that same timeframe, the retailer added 13 new QuickChek stores, helping that brand generate record results in food and beverages.

The company continues to convert its legacy network of kiosks to 1,400-square-foot stores through a raze-and-rebuild program, resulting in increased gallons and merchandise sold post-conversion.

"Given our performance against this backdrop and the environment which we compete that is characterized by flat to negative macro demand, especially in fuel and cigarettes, this begs the question: If we are getting more in the marketplace, what does that mean for everyone else?" Clyde posed. "We believe it means others, especially those who don't have their own unique value proposition, are getting less. We're taking share."

By the Numbers

Murphy USA reported net income of $150 million for the fourth quarter of 2023, compared to net income of $117.7 million for Q4 2022. For full year 2023, net income was $556.8 million, compared to net income of $672.9 million in 2022.

Revenue was $5.1 billion during the fourth quarter vs. $5.4 billion during the same quarter a year ago, while revenue for the full year was $21.5 billion vs. $23.4 billion the prior year. EBITDA was $275 million for Q4 2023 and $1.06 billion for the full year vs. $230 million in Q4 2022 and $1.2 billion in 2022.

Average retail gasoline prices averaged $2.97 per gallon during Q4 and $3.109 for the full year. Total retail gallons sold held steady in Q4 2023 compared to one year ago at 1.2 billion, while volumes declined 2% on a same-store sales basis during the quarter. Total gallons for the year also held steady at 4.8 billion, but volumes on a same-store sales basis for 2023 decreased 1.8% compared to the previous year.

"2023 financial results and operational performance are a testament to the strong foundations we have built at Murphy USA over the last decade, successfully executing against our strategy and widening our advantage in the marketplace," Clyde said. "Structural resilience in fuel margins coupled with high volumes generated over $1.5 billion in fuel contribution in 2023. This performance in a less volatile environment increases our confidence in the longevity of elevated fuel margins that complements and helps strengthen our everyday low-price model, helping us to deliver more value to our customers."

El Dorado-based Murphy USA has more than 1,700 stores located primarily in the Southwest, Southeast, Midwest and Northeast United States. The company and its team of nearly 15,000 employees serve an estimated 2 million customers each day through its retail network in 27 states. The majority of Murphy USA's stores are located in close proximity to Walmart Supercenters. The company also markets gasoline and other products at standalone stores under the Murphy Express and QuickChek brands.