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    Gas-Discount Deal Leads Murphy USA's Summer Promos

    CEO sees late Q1 momentum continuing.

    By Melissa Kress, Convenience Store News

    EL DORADO, Ark. — The unofficial start to summer is still three weeks away, but Murphy USA Inc. is already geared up for a season full of promotions.

    On May 1, the convenience store retailer kicked off a summer gas promotion that allows customers with the Murphy USA Visa Card to save 15 cents per gallon at Murphy USA and Murphy Express locations. The promo includes the everyday 5-cent discount plus an additional 10 cents off through Sept. 5. 

    This deal is just one of the promotions the company has planned for the coming months, according to Andrew Clyde, president and CEO of Murphy USA. 

    "On Monday, we launched a special Murphy Visa Card promotion that will be running throughout the summer where all Visa card users are getting 15 cents off per gallon as well," Clyde said during the company's first-quarter earnings call, held May 2. "There is just a lot of meaningful activities that are going to continue in the second quarter and throughout the summer."

    These "meaningful activities" come as Murphy USA looks to put a weak first quarter behind it. As CSNews Online previously reported, EBITDA fell to its lowest level since 2011 — coming in at $30.3 million vs. $83.1 million in the same period a year ago. However, as Clyde pointed out, the first-quarter results of 2016 were above the prior four-year average of $39 million.

    Despite the weak start to this year, Murphy USA saw things begin to turn around in March, and the momentum continues. 

    According to Clyde, there were "a number of outlier events in adjustments" to consider when comparing the first-quarter results to year-ago results:

    • An extra day in 2016 that created a roughly 1.1-percent negative impact on the numbers;
    • The transition to distributor Core Mark Holding Co. in February 2016 along with a partial final payment from the former contract with McLane Co. Inc., which raised margins in 2016 and largely showed up in tobacco margins; and
    • A $1.6-billion lotto jackpot in January 2016 generated large margin contribution from the lottery category that was not repeated in 2017.  

    "And last, we have recognized that the market environment was not strong to start the year, tracking along the lines of fuel demand in January," Clyde said. "So, the negative comps are not all one-time items, but I would point out that we exited March with momentum in merchandise and, with some new initiatives, we are seeing [second-quarter] results that are more representative of the potential of our business."

    Notably for March, both tobacco and non-tobacco margins were up, he reported.

    "We continue to see that kind of momentum going forward. We are really starting to see the benefits of new leadership, people in new roles, some of the performance improvement efforts that we have talked about in the past showing up in the results," the chief executive said.

    "We are seeing it in the way we are doing pricing center-of-store optimization, the promotion effectiveness, activities, and just the natural way in which we are interacting with our vendors and supplier partners in a much more strategic way," he continued. "I think those trends will continue as we will be having a more robust set of promotional offerings during the summer."

    El Dorado-based Murphy USA ended the first quarter of 2017 with 1,406 stores, consisting of 1,152 Murphy USA sites and 254 Murphy Express sites. A total of 35 stores are currently under construction, including 17 raze-and-rebuild locations.

    By Melissa Kress, Convenience Store News
    • About Melissa Kress Melissa Kress joined EnsembleIQ's Convenience Store News in November 2010. Her primary beats include alcoholic beverages and tobacco. Kress has been a professional journalist since 1995. A graduate of West Virginia University, she began her career in community journalism before moving to business-to-business publishing in 2000, covering commercial real estate.

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