Kroger, the nation’s largest grocery chain, has announced the resignation of its Chairman and CEO, Rodney McMullen, following the results of an internal investigation concerning his personal conduct. The grocery giant, which operates Smith’s among other brands, confirmed the investigation was unrelated to company business but deemed McMullen’s behavior inconsistent with its business ethics policy.
The resignation, effective March 3, 2025, occurs at a pivotal time for Kroger as it regroups from a failed attempt to merge with rival supermarket chain Albertsons. This proposed merger, which would have been the largest in U.S. history at $24.6 billion, was halted last December when two judges ruled it likely would reduce competition and result in higher prices for consumers.
According to Kroger, the investigation was brought to the company’s attention on February 21, 2025. Following this notification, the Board quickly engaged independent counsel to conduct the inquiry, overseen by a special committee devoted to the matter. The findings revealed issues with McMullen’s conduct but clarified they were separate from any operational functions or financial reporting, stating, "The investigation was found to be inconsistent with its business ethics policy," according to company representatives.
McMullen, who has been with Kroger since 1978, started as a part-time stock clerk and worked his way up to several key roles, achieving the CEO position in 2014 and becoming chairman the following year. His leadership, which spanned nearly a decade, will now be followed by the interim chairmanship of Ronald Sargent, also part of Kroger's board since 2006. Sargent, who has served as lead director since 2017, has extensive experience within the grocery industry, having also held the title of Chairman and CEO at Staples.
Meanwhile, the ripple effects of Kroger's attempted merger with Albertsons continue to be felt. After the halted merger's decision, Albertsons has claiming legal grievances against Kroger, alleging the latter did not put forth sufficient efforts to secure regulatory approval for the deal. Albertsons expects to make leadership changes with current CEO Vivek Sankaran announcing plans to retire on May 1, 2025. His successor will be Susan Morris, who currently serves as the executive vice president and chief operating officer.
Despite Kroger's shifting leadership and recent turmoil, the company is now focused on finding a permanent CEO. Sargent has agreed to remain as the interim CEO until such decisions are made, with he and other board members likely seeking to stabilize both operations and the company’s market standing.
Kroger’s stock faced volatility following these developments, demonstrating the uncertainty surrounding the company's future direction. Shares fell nearly 3 percent just days after the announcement, reflecting investor concerns about the impact of leadership changes and recent litigation on its business model.
Analysts suggest this pivotal moment could either hinder Kroger’s competitive positioning against larger rivals like Walmart or offer them the opportunity to implement necessary changes and restore customer confidence. The quest for Kroger's next permanent CEO will play a significant role, as the board seeks to maintain its foothold within the competitive grocery market and address issues arising from the failed merger with Albertsons.
Going forward, the chain will have to navigate these high-stakes challenges, aiming to not only regain public trust following this leadership shakeup but also strategize on how to effectively compete against rivals vying for market share amid rising grocery prices and shifting consumer preferences.