Kroger, the largest grocery chain in the United States, announced a change in its leadership following the resignation of Chairman and CEO, Rodney McMullen. This decision came after an internal probe into McMullen’s personal conduct, which was determined to be inconsistent with the company’s business ethics policy. The investigation clarified that the issues did not relate to Kroger’s business, financial performance, or anyone within the firm.
Effective immediately, Ronald Sargent, a board member since 2006 and the lead director since 2017, has stepped in as the interim CEO and chairman. Sargent brings extensive experience in the retail sector, having held a variety of positions within Kroger, focusing on areas such as sales, marketing, manufacturing, and strategic development. Additionally, he has previously served as the Chairman and CEO of Staples.
McMullen’s journey with Kroger began in 1978 when he joined as a part-time stock clerk and bagger in Lexington, Kentucky. Over the years, he climbed the ranks, assuming the role of chief financial officer in 1995, chief operating officer in 2009, and eventually CEO in 2014, followed by his appointment as chairman in 2015.
Kroger revealed that the issue came to the board’s attention on February 21, following which an external independent counsel was appointed to carry out the investigation, led by a special committee of the board. As Kroger sets out to find a new permanent CEO, Sargent has committed to fulfilling the interim role until a successor is named.
In the meantime, Kroger’s shares saw a nearly 3% decline on Monday. McMullen’s resignation coincides with Kroger’s strategic reassessment after the collapse of its planned merger with Albertsons, which would have been the largest supermarket merger in American history. This $24.6 billion merger was halted by judges in December due to concerns that it could reduce competition and lead to higher prices. Subsequently, Albertsons pressed legal charges against Kroger, accusing it of not adequately advocating for the merger’s regulatory approval.
Additionally, Albertsons disclosed that its CEO, Vivek Sankaran, will be retiring effective May 1. Susan Morris, serving as the executive vice president and chief operations officer, is set to succeed Sankaran and lead Albertsons into its next phase.
