Kroger Corporation, a major retail chain in the United States, announced the resignation of Rodney McMullen, the Chairman and CEO. Prior to this, the company had initiated an internal investigation into his personal conduct.
The largest food and grocery chain in America, Kroger Corporation, stated on Monday (March 3) that the investigation into McMullen’s personal conduct was unrelated to the company’s operations but found that his behavior did not align with the company’s business ethics policy.
Board member Ronald Sargent will assume the role of Chairman and interim CEO, effective immediately. Sargent has been a member of Kroger’s board since 2006 and served as the company’s Chief Director since 2017. He has held various positions within the grocery chain, including in store operations, sales, marketing, manufacturing, and strategy. Sargent is also a former Chairman and CEO of the office supplies chain Staples.
At age 64, McMullen started working at Kroger in 1978 as a part-time inventory and bagging clerk at a store in Lexington, Kentucky. He rose through the ranks within the company, becoming Chief Financial Officer in 1995, Chief Operating Officer in 2009, CEO in 2014, and was appointed Chairman in the following year.
Headquartered in Cincinnati, Ohio, Kroger Corporation disclosed that its Board learned of McMullen’s personal conduct on February 21 and promptly hired an external independent legal advisor to conduct an investigation, overseen by a special board committee.
The company clarified that McMullen’s actions were unrelated to the company’s financial performance, operations, or reporting and did not involve any Kroger employees.
Kroger Corporation is now in search of its next CEO while Sargent has agreed to continue as interim CEO until a permanent successor is appointed. Prior to Monday’s opening bell, Kroger’s stock price dropped over 3.5%.
McMullen’s departure comes at a time of restructuring for Kroger following the failed merger attempt with another grocery giant, Albertsons. In 2022, the two companies proposed the largest supermarket merger in U.S. history, citing the need to combine forces to better compete against rivals like Walmart.
However, two judges halted the $24.6 billion deal in December of the previous year, stating it could weaken industry competition and raise prices. Albertsons later sued Kroger, alleging they failed to make all necessary efforts to secure regulatory approval for the merger.
(Reference: Associated Press)