While inflation is a “wild card,” Murphy USA President and CEO Andrew Clyde said on the company’s fourth-quarter 2024 earnings call Thursday that he thinks there will continue to be elevated inflation in 2025.
“Overall, 2024 was a disappointing year,” Clyde said.
This was due to several reasons, including a slow start to the year as rising prices and severe weather hindered transactions; continued pressure of food inflation, in conjunction with QSR value wars, which pressured QuickChek markets; and Murphy USA not reaching its internal schedule targets for new store openings, which impacted fuel gallons and merchandise, Clyde said.
The Consumer Price Index (CPI) for all food increased 0.2% from November 2024 to December 2024, according to the U.S. Department of Agriculture. Food prices were 2.5% higher than in December 2023. In 2025, overall food prices are expected to rise at a rate similar to that of 2024, the agency said.
Murphy USA is No. 4 on CSP’s 2024 Top 202 ranking of U.S. convenience-store chains by store count.
Grocery and convenience retailers also scrambled early in the week to address the effects that massive tariffs on Canada, Mexico and China would have on their businesses; however, President Donald Trump’s administration later announced the U.S. had struck last-minute deals with Mexico and Canada to delay new tariffs.
“We certainly don’t know if all the tariff discussions really translate into more tariffs and therefore higher costs, or if it’s a negotiating ploy for something else, and they’re delayed and they never come into existence,” Clyde said. “Certainly, some of the government initiatives that drove higher spending kept labor rates elevated, we may see some of that decline.”
“One of my colleagues made the comment the other day that this business is made to win despite the news cycle, and we see a new cycle every single day,” he continued. “And honestly, we just stay focused on what we can do, control what we can control, and that’s really the key message our leadership gives to our team.”
If the United States sees higher inflation, there will be pressure on the Murphy USA consumer, Clyde said.
“We saw a lot of trade down this year to Murphy,” he said. “One thing I’ll tell you is that in the last quarter, and looking year over year, even our low-income consumers spent the exact same amount per month from our static panel on the loyalty side.”
Gallagher Jeff, Murphy USA’s CFO, said the strength of Murphy USA and QuickChek’s rewards programs will help customers facing inflation.
“As the customer seeks more value, both from the Murphy’s side and now the QuickChek side, we can target what resonates with them,” Jeff said. “And so in an inflationary environment, we actually know a lot more about our customers than we did a year ago, and can offer them the right product at the right price, which we believe will continue to help our business.”
El Dorado, Arkansas-based Murphy USA operates one of the nation’s largest convenience-store chains, operating in 27 states, located primarily in the Southwest, Southeast, Midwest and Northeast, the majority of which are next to Walmart Supercenters. It acquired the QuickChek brand in January 2021.
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