Rodney McMullen, Chairman and CEO of Kroger, has resigned following an internal investigation into his personal conduct. The grocery giant announced Monday that while the investigation was unrelated to business matters, McMullen’s behavior was found to be inconsistent with the company’s ethics policy.
Board member Ronald Sargent has been appointed as chairman and interim CEO, effective immediately. Sargent, who has been on Kroger’s board since 2006 and served as lead director since 2017, is also the former Chairman and CEO of Staples. Kroger has begun the search for a permanent CEO, with Sargent remaining in the role until a successor is chosen.
McMullen, 64, started his career with Kroger in 1978 as a part-time stock clerk in Lexington, Kentucky. He worked his way up to chief financial officer in 1995, chief operating officer in 2009, and ultimately CEO in 2014. His tenure saw the company grow into the largest grocery chain in the U.S.
Kroger’s board became aware of the situation on February 21 and quickly launched an investigation, led by an independent counsel and overseen by a special board committee. The company confirmed that McMullen’s conduct did not impact Kroger’s financial performance, operations, or involve any company employees.
The leadership change comes as Kroger deals with the fallout from its failed merger with Albertsons. The proposed $24.6 billion deal, which aimed to help the two chains compete with rivals like Walmart, was blocked by two judges in December over concerns about reduced competition and rising prices. Albertsons has since sued Kroger, alleging that the company did not make every effort to secure regulatory approval.
Kroger shares dropped nearly 3% following the announcement.
Meanwhile, Albertsons also announced leadership changes on Monday. CEO Vivek Sankaran will retire on May 1, with Susan Morris, the company’s current executive vice president and chief operations officer, set to take his place.
