Kroger Ousts Long-Time CEO After Probe Into Personal Conduct
Kroger said on Monday CEO Rodney McMullen has resigned after a board investigation found that his personal conduct was "inconsistent" with certain company policies. The conduct is not related to financial performance, operations or reporting, and it did not involve any Kroger associates, the company said. The surprise ouster of the 64-year-old executive comes after the company in December terminated a two-year effort to buy rival Albertsons in a $25 billion deal, an attempt McMullen had staunchly defended as a way to fight higher prices and better compete with Walmart and Costco.
The board has appointed lead director Ronald Sargent as interim CEO. A long-time director at Kroger, Sargent was previously the CEO at Staples for more than a decade. The board has formed a search committee and appointed a firm to conduct a search for its next CEO.
Total Retail's Take: This sudden change in leadership adds more uncertainty to Kroger's future following the failed merger with Albertsons late in 2024. Furthermore, increased competition from Walmart and Amazon.com in the grocery category, among other regional players, leads to questions regarding Kroger's future. While it's unlikely that we will see major change as Sargent takes over the CEO role on an interim basis, according to Xu Jiang, associate professor at Duke University's Fuqua School of Business, who was quoted in the Reuters report, the future direction of Kroger may hinge on the hiring of a permanent CEO. Who that person will be remains to be seen, as does the stability of the company he or she will inherit.
