Murphy USA Inc. has an energy fill-up for drivers as well as their cars these days.
The El Dorado gasoline and convenience retailer is “majoring in energy drinks,” CEO Andrew Clyde told Arkansas Business.
Since buying about 160 QuickChek stores in New Jersey and the New York metro area in 2021 for $645 million, Murphy USA is capitalizing on the chain’s food and beverage expertise.
“I’m having my coffee this morning; you probably had a couple of cups when you got up,” Clyde said in a teleconference interview last month. “But coffee is in a slow decline. The new demographics are still consuming caffeine, but they’re doing it through energy drinks made famous by the two biggest brands, Red Bull and Monster.”
Upstarts like Prime and Celsius are bringing social media and healthier brand propositions into the mix, and Murphy USA is looking to QuickChek as it plans its new 2,800-SF stores.
QuickChek achieved record food and beverage sales in the second quarter, and is guiding new menu offerings, including energy drink slushies.
“There’s a wide variety of energy drinks out there, and we provide that range to our customers in package form in our cold vault,” Clyde said, referring to refrigerated cold drink cases. “And we’re the only retailer in the industry that’s making a frozen Red Bull-infused energy drink, and those have been really taking off.”
A sugar-free Prime energy drink quickly made up about 20% of the drinks ordered at Q Cafe, QuickChek’s in-store cafes, he said.
“We’re working to bring that innovation to Murphy USA in the form of a self-serve ice dispensed drink,” he said. “We had a limited-time offer of a watermelon slushie at QuickChek, and we had a limited-offer Sour Patch Kids slushie drink at Murphy USA.”
Clyde said distinctly flavored icy drinks and brands like Sour Patch Kids and Jolly Rancher “really get the consumer’s attention.”
Murphy USA, spun off from Murphy Oil Corp. a decade ago, has some 1,700 locations, but it lacks QuickChek’s decades of food and beverage expertise. QuickChek commonly offers made-to-order subs, grilled cheese and breakfast sandwiches, chicken tenders and more.
Still, Murphy USA is adapting, adding items to its grab-to-go cases, like refrigerated cookie-dough bites.
And Murphy USA is still selling a lot of automobile fuel, and at a high margin: close to 29 cents per gallon.
And it’s building more stores.
“We’re in a mature industry, but mature industries still have two cycles, growth and harvest,” he said. “We’ve been adding 30 to 40 stores a year consistently over the last few years with our bigger format,” and the company is adding QuickChek stores that are about twice as big as Murphy’s 2,800-SF stores that have cropped up around Little Rock.
“The QuickChek stores cost twice as much, but they generate twice the profit, so the returns are actually about the same,” Clyde said. “Just as important, we’re aggressively razing and rebuilding our old kiosks that we built in the late ’90s and early 2000s. When they get 20 years old, we take down the stores, replace the underground tanks with bigger tanks, add dispensers for diesel and an ethanol-free product, and build a larger 1,400-foot walk-in store.”
As Murphy USA celebrates its 10th anniversary, it’s also celebrating that growth.
“We’ve grown our square footage by over 357% since 2013, which is pretty significant,” Clyde said. “It’s almost a million square feet of added selling space.”