Merchandise contribution grew 8.1% in fourth-quarter 2017 while average unit margins hit a record 16.3%. For the full year, merchandise dollars rose nearly 5%.
“Notably, this improvement in merchandise, which shows a 4.4% increase in average per-store month margins in the fourth quarter comes despite lower fuel traffic and transactions,” Clyde noted. “We are showing balance and sustainable growth in all categories, across all formats, so we are excited about the momentum we are bringing into 2018.”
He pointed to the success of a fourth-quarter tobacco promotion that helped push same-store margins up 6%. “This level of customer uptake, which registered over 1 million unique participants in an 8-week time frame, is a positive indicator of the kind of impact we believe a wider Murphy USA loyalty offer can generate.”
Murphy USA also exited a couple of product segments: fuel additives blended at the pump, which were proving unnecessarily complex, and certain unnamed brands of prepaid gift cards, which it said were fraud risks.
The retailer has created a floor plan that consolidates 90% of the product from its larger 3,400-square-foot stores into a 2,800-square-foot store that can still be built modularly. For 2018, most of Murhpy USA's new-to-industry growth will be 1,200-square-foot sites near Walmart stores, and a third will be the medium (2,400 square feet) and large (3,400 square feet) stores.