EL DORADO, Ark. — As Murphy USA Inc. approaches the 10-year anniversary of its spinoff from Murphy Oil Corp., President and CEO Andrew Clyde sees a decade's worth of hard work paying off.
"I was really struck by how last year's performance reflected so many of the improvements we have made to the business since our spin in 2013," Clyde said during the company's 2022 fourth-quarter and year-end earnings call. "These results reflect a lot of hard work over the past decade, executing against the key elements of the strategies we established a spin to create a sustainable and advantaged business."
After the spinoff, Murphy USA prioritized organic growth and added more than 500 stores to its network from 2012 to 2022. It also improved store productivity, optimizing cost while improving per-store merchandise contribution; substantially reduced its fuel break-even metric; and enhanced employee engagement and customer satisfaction.
"These actions improved our already low-cost position on the industry supply curve, while our relative advantage increased further as costs for the broader industry rose," Clyde said. "We also leveraged our fuel infrastructure assets and capabilities to lower our supply cost and maximize our fuel contribution dollars through our retail pricing excellence campaign."
The 2019 launch of the Murphy Drive Rewards program, which has seen favorable participation rates and high usage of rewards points, also added to the company's competitive advantage. High points redemption is an indication of continuous engagement.
Additionally, its 2021 acquisition of QuickChek Corp. primed Murphy USA to be a strong player in the foodservice category by significantly enhancing its food and beverage capabilities, and introduced a new advantaged format for growth, according to Clyde.
Murphy USA's disciplined capital allocation strategy has also resulted in nearly 50 percent store count growth and significant shareholder value for long-term investors, he added.
"These investments, coupled with our relentless focus on operational excellence, helped lay the groundwork for the company's outstanding 2022 results," Clyde said.
Inflation and preparations for a possible recession have moved many consumers to tighten their purse strings, but the company is well positioned for the future at a time when "affordability matters more to more people," Clyde predicted.
Next 10 Years
In its second decade, Murphy USA's leadership expects to continue delivering results and make investments that will better prepare the retailer to compete and win in 2023 and beyond. This includes adding another 500 high-performing stores while proceeding with ongoing efforts to improve the existing store network via the company's raze-and-rebuild program, along with other investments.
The company continues to focus on improving same-store productivity, increasing efficiency across all aspects of the business and maintaining its low cost structure, which supports Murphy USA's everyday low-price strategy.
Finally, the company will embark on a comprehensive set of new investments to extend and widen its competitive advantage, Clyde said. These investments include:
A digital transformation to help evolve the reach and effectiveness of Murphy Drive Rewards, leveraging customer shopping habits to customize more impactful offers at scale and trigger point-of-sale upselling opportunities. Transaction data will also help inform pricing and assortment optimization at the local and store level.
Informed by these digital learnings and capabilities, a redesign of the QuickChek loyalty program to increase brand awareness and attract new customers.
A comprehensive redesign of the interior of new and existing Murphy stores, which will leverage critical insights from consumer research, QuickChek's food and beverage expertise and analyses of subcategory performance.
"This effort goes beyond routine category resets," Clyde said. "The resets represent a fundamentally different experience for our customer that will better showcase the breadth and accessibility of our product offerings and drive higher in-store sales.
"In turn, we will take full advantage of these combined learnings and synergies in the imagination and design of our store of the future, which we expect will enhance new store performance and returns over the next decade," he added.
El Dorado-based Murphy USA's network comprises more than 1,700 stations primarily in the Southwest, Southeast, Midwest and Northeast regions of the United States. The company also markets gasoline and other products at standalone stores under the Murphy Express and QuickChek brands.