Dive Brief:
- Murphy USA remains on pace to hit its goal of opening between 45 and 55 new convenience stores through fiscal 2026, company leaders said during its first-quarter earnings call last week.
- Murphy has opened seven NTIs this year, six of which debuted in Q1, and has 18 more under construction, with an additional 25 expected to break ground in the next 90 days, Chief Financial Officer Donnie Smith said in prerecorded earnings remarks. Murphy’s merchandise margin contribution continued to grow, increasing 7.3% during the quarter, according to its report.
- While the Murphy brand is growing, the same can’t be said for QuickChek, the East Coast c-store chain that Murphy acquired five years ago, which continues to see traffic declines and more closures than openings.
Dive Insight:
Murphy has prioritized the growth of its main banner in recent years, setting a goal at the end of fiscal 2022 to open 500 NTIs in the following decade. Although the pace of those openings needs to ramp up to achieve that mark — Murphy added exactly 100 new stores to that banner between the end of fiscal 2022 and last week — the growth is nonetheless consistent, with inside sales continuing to support the initiative.
But for QuickCheck, it’s a different story.
When Murphy acquired QuickChek back in January 2021, the New Jersey-based retailer had 157 convenience stores in its network. More than five years later, QuickChek’s store count has dropped to 148, according to the latest earnings report. During Q1 of this year, Murphy closed three QuickChek locations without opening any, though it has six under construction.
The exact reason behind QuickChek’s stalled growth remains unclear, although Murphy has previously indicated that the chain continues to face margin and traffic pressures. Earlier this year, Murphy President and CEO Mindy West said that QuickChek was “refocusing on the fundamentals,” particularly the need to be more disciplined around balancing innovation with cost and margin control.
During Murphy’s latest earnings call, West reiterated that message, this time adding that pressure from QSR brands in the Northeast is creating difficulties for QuickChek. Murphy is “taking steps to try to improve the business,” West said.
“We're focusing on the core items and the food offer — think coffee, breakfast sandwiches,” West said. “We're really simplifying the menu, rationalizing the assortment, improving the margin.”
West reiterated that leadership is trying to evolve QuickChek’s working culture “into a sales-first mentality” that’s more in line with how Murphy operates.
“We need to improve time-to-serve, and we need to ensure our sales and promotional calendars are reinforced with products with the right margin structure, versus thinking of ways to drive traffic that are not margin accretive,” West said.
