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A Successful First Year

Murphy USA Inc. has a business model that?s difficult to replicate since many of the El Dorado, Ark.-based company?s stores are strategically positioned in the parking lots of Walmart stores. This means the convenience store retailer has no lack of store traffic and can offer cross-marketing deals with the big-box retailer that few competitors can match.

After being spun off from Murphy Oil Corp. on Sept. 1, 2013, Murphy USA President and CEO Andrew Clyde set forth a three-step plan for the new independent company:

  • Grow organically;
  • Diversify its merchandise mix despite operating some smaller legacy stores; and
  • Remain committed and engaged in the fuel category.

?Let?s be clear,? Clyde said during Murphy USA?s Analyst Day in April. ?Ninety-nine percent of our customers are Walmart?s customers. We are there to provide low-cost fuel and other items to those customers as part of the overall value proposition. So, in a competitive world where Murphy USA stores offer gasoline and have programs, we need to be consistent with all programs.?

The operator of 1,035 Murphy USA sites and 193 Murphy Express stores is sticking to these three tenets as it begins year two as a public company. Regarding organic growth, the company opened nine new stores in its second quarter ended June 30, and another five as of early August. The convenience store retailer also broke ground on 18 new stores in August alone.

?We?ve been pretty much opening one new store per week,? Clyde said.

Whether it?s a new large-format Murphy Express location of 1,200-plus square feet or a legacy store redesign, the goal is to create an enticing and memorable customer experience.

The retailer is partnering with Chute Gerdeman to perform many of these redesigns and new builds, aimed at providing customers a ?fast, efficient and fresh? layout. As of press time, the Columbus, Ohio-based design firm had implemented this approach at 76 Murphy USA stores.

?The new store design needed to convey speed and efficiency so that customers knew it would be a truly convenient option for them,? explained Adam Limbach, Chute Gerdeman?s vice president of brand communications, who heads up the Murphy USA design team. ?As a result, basket size increased as well as more food and beverage purchases.?

The rebuilding efforts are paying off. In-store merchandise sales have been gangbusters, led by robust results from dispensed beverages, salty snacks and alternative snacks. In its most recent quarterly results, Murphy USA saw in-store merchandise sales increase by 6.3 percent year over year.

As for the third tenet, regarding fuel, Murphy USA initiated its Walmart 15-cent/10-cent fuel discount program on May 18 and concluded the program just after Labor Day. The popular promotion positioned Murphy USA well in its fiscal third quarter, noted Clyde.


Murphy USA is definitely pleased with its first year as a standalone public company.

?We are proud of the strong foundation we built, as well the value we are building for shareholders,? the chief executive stated.

The retailer certainly has the numbers to back up this claim, earning a net profit of $82.1 million for the first six months of 2014.

Of course, the company cannot rest on its laurels. Plenty more work must be done to propel Murphy USA in the future, but the c-store retailer is surely off to a strong start.

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