Kroger CEO Steps Down Amid Conduct Probe

Kroger’s Chairman and CEO, Rodney McMullen, has stepped down following an internal investigation concerning his personal conduct. The well-known grocery chain, based in Cincinnati, stated on Monday that the probe into McMullen’s conduct was linked to personal behavior issues and showed inconsistencies with the company’s business ethics policy. The investigation’s findings were unrelated to business matters.

In response to McMullen’s resignation, Board member Ronald Sargent has been appointed as the interim CEO and chairman. Sargent, who joined Kroger’s board in 2006 and became the lead director in 2017, brings a wealth of experience to the role. He has held numerous positions within the grocery chain, spanning operations such as sales, marketing, manufacturing, and strategy. Additionally, Sargent has previous leadership experience as the former Chairman and CEO of Staples.

Rodney McMullen’s career at Kroger began in 1978 when he started as a part-time stock clerk and bagger at a Kentucky store. Over the years, he climbed the corporate ladder, becoming chief financial officer in 1995, chief operating officer in 2009, and ultimately CEO in 2014. He was appointed chairman the following year, solidifying his influential role within the company.

The situation came to light on February 21 when Kroger’s board was alerted and swiftly engaged an independent external counsel to conduct the investigation, which was managed by a special board committee. Importantly, the investigation concluded that McMullen’s actions did not impact company financial performance or operations, nor did they involve any other company employees.

With McMullen’s exit, Kroger plans to initiate a search for a new chief executive, while Sargent commits to maintaining his interim role until a permanent successor is found. This leadership change coincides with Kroger’s efforts to recuperate from the unsuccessful attempt to merge with Albertsons. The merger, proposed in 2022, was intended to be the largest supermarket merger in U.S. history, aimed at strengthening the companies’ position against rivals like Walmart.

However, in December, two judges halted the $24.6 billion merger, citing potential reductions in competition and potential price increases. In the aftermath of these legal obstacles, Albertsons filed a lawsuit against Kroger, alleging the latter’s failure to diligently seek regulatory approval for the merger. Meanwhile, Kroger’s shares took a hit, dropping more than 3.5% prior to Monday’s market opening in the wake of McMullen’s departure.