Kroger, the grocery chain headquartered in Cincinnati, announced on Monday that its CEO, Rodney McMullen, has resigned following an investigation by the company’s board into his personal conduct. According to a statement from Kroger, the investigation revealed that Mr. McMullen’s actions were inconsistent with the company’s business ethics policy. However, the conduct in question was unrelated to Kroger’s financial performance, operations, or any interactions with Kroger employees.
The board became aware of “certain personal conduct” involving Mr. McMullen on February 21 and promptly engaged external counsel to lead an inquiry. The company emphasized that the actions under scrutiny were unrelated to Kroger’s business operations.
In response to the leadership change, Kroger appointed Ronald Sargent, the company’s lead director, as interim CEO while a permanent replacement is sought. Mr. Sargent, who has served on Kroger’s board since 2006, also assumed the role of chairman. In a statement, Mr. Sargent expressed his commitment to maintaining stability and advancing the company’s strategic goals.
Mr. McMullen’s departure marks the end of a 40-plus-year career at Kroger. He began as a part-time stock clerk in 1978, joined the board of directors in 2003, and became CEO in 2014. He was named chairman in 2015. The announcement comes just days before Kroger is set to release its fourth-quarter earnings.
The leadership change adds to a challenging period for Kroger, which recently faced significant setbacks in its attempted $25 billion merger with Albertsons. The deal, which would have been the largest grocery merger in U.S. history, was blocked by federal and state regulators in December. Albertsons subsequently filed a lawsuit against Kroger, alleging the company failed to make sufficient efforts to secure regulatory approval. Kroger has denied these allegations.
The Federal Trade Commission opposed the merger, arguing it would harm competition, workers, and consumers by reducing choice and raising prices. Judge Adrienne Nelson of the U.S. District Court in Oregon ruled in favor of the FTC, and a Washington state court issued a similar decision shortly thereafter.
— news from The New York Times