EL DORADO, Ark. — In a year that started with an unprecedented increase in fuel prices, executives from Murphy USA focused on successes in fuel and tobacco to characterize its past fiscal year.
Overall, revenue for the fourth quarter and full-year 2019 was $3.5 billion and $14 billion, respectively, officials said. The numbers compare to $3.5 billion and $14.4 billion in the year-ago period. In the fourth quarter, the decrease was attributable to lower retail gasoline prices and lower gallons sold, partially offset by higher merchandise sales. The full-year decrease was attributable to lower retail gasoline prices partially offset by higher fuel volumes sold and higher merchandise sales.
Regarding fuel numbers, Andrew Clyde, president and CEO of El Dorado, Ark.-based Murphy, said the company not only grew volume but also did so profitably, with an opportunity for growth in 2020.
For the fourth quarter, total retail gallons decreased 1.6% for the network, while volumes on a same-store basis decreased 3.4%. For the year, however, retail gallons increased 3.4% to 4.4 billion and 1.2% on a same-store basis.
As expected, fourth-quarter 2019 volume and margin results in a rising price environment fell short of fourth-quarter 2018 results; however, the company is seeing “uncharacteristically higher margins in January as prices have fallen sharply, which is a bonus for starting off a new year and once again positions us to grow volume profitably.”
Inside the store, merchandise contribution grew 4.8% to a record $419 million, driven by a 4.5% gain in per-store tobacco volume. Improved execution and its new Murphy Drive Rewards (MDR) loyalty platform provided better access manufacturers’ discount programs. “We expect to continue to take share and are carrying significant momentum into 2020,” Clyde said.
From an MDR standpoint, Clyde said 2019 was about engaging the customer, with the program now having almost 3 million fully enrolled members. “2020 will be about monetizing MDR with our vendor partner support as we deliver greater value, more efficiently and effectively,” he said.
New state and federal vaping restrictions and the increase in the minimum age to buy tobacco products from 18 to 21 nationally were built into its costs, Clyde said, with both regulatory changes occurring in just the past few months.
Last year also marked a shift in the network’s portfolio. It now has less than 50% kiosks in its mix, which is the result of its ongoing raze-and-rebuild program. During fourth-quarter 2019, Murphy USA opened 10 new stores and reopened 10 razed-and-rebuilt sites. For the year, it opened 17 new stores and reopened 27 raze-and-rebuild locations. The year-end store count was 1,489.
“The shifts in fuel and merchandise discussed before have led to better new store metrics as the larger 2,800-square-foot stores ramp up to their higher potential, providing conviction to us around this format as we increase our [new-to-industry] activity going forward,” Clyde said.
Murphy USA is No. 5 on CSP’s 2019 Top 202 ranking of convenience-store chains by store count.
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