Kroger announced Monday CEO Rodney McMullen has resigned following “a board investigation of his personal conduct.”
Lead Director Ronald “Ron” Sargent has been appointed interim CEO, effective immediately.
Kroger said McMullen’s conduct was “unrelated to the business,” but “was inconsistent with Kroger’s policy on business ethics.”
What the investigation found
In a statement, Cincinnati-based Kroger said on February 21 the board “was made aware of certain personal conduct by Mr. McMullen.” The board immediately hired an outside attorney to conduct an investigation, which a special board committee oversaw.
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Kroger also said: “McMullen’s conduct is not related to the company’s financial performance, operations or reporting, and it did not involve any Kroger associates.”
Kroger’s board of directors has formed a search committee and hired a firm to conduct a search for Kroger’s next CEO. Sargent has agreed to serve in his role until the appointment of the next CEO.
Tenure comes to abrupt end
McMullen’s departure comes after more than a decade at the helm and after a period of solid growth and multiple acquisitions.
Previously the chief operating officer, McMullen, 64, became the CEO on Jan. 1, 2014 and became board chairman a year later. Under his leadership, Kroger’s total sales grew from $98 billion to $150 billion. It also acquired Harris Teeter and Roundy’s supermarkets.
In December, McMullen’s quest to take over Albertsons was blocked by two court orders and Albertsons pulled out of the deal.
Who is Ron Sargent, McMullen’s temporary replacement
Sargent is the former CEO of office retail giant Staples, which he led as CEO for 15 years until 2016. He joined Staples in 1989. He has 35 years of retail experience.
Sargent began his career at Kroger, first working summers at the stores during college, then spending 10 years in several roles across stores, sales, marketing, manufacturing and strategy. He went to Harvard University for his undergraduate studies and also earned a master’s of business administration there. He lives in Cincinnati and has been on the Kroger board since 2006 and is lead director since 2017.
“As interim CEO, I am committed to working alongside our proven and experienced management team and dedicated associates to ensure Kroger continues providing exceptional value for our customers,” Sargent said in a statement. “Kroger has been a special place throughout my retail career … My decades here have given me a full appreciation of what makes Kroger unique.”
Sargent pledged to be “a steady, but active hand” at Kroger.
“Over the years, Ron has played an integral role in the development and approval of Kroger’s strategy, which has led us to the position of strength where we are today,” said Mark Sutton, Kroger’s newly appointed lead independent director, in a statement. “Kroger will continue to deliver for our customers, invest in our associates, strengthen our communities, and reward our shareholders under Ron’s leadership.”
How big is Kroger
Kroger operates more than 2,700 stores in 35 states and the District of Columbia. It operates stores under the Kroger banner name as well as Fred Meyer, Ralphs, Harris Teeter, Pick ‘n Save, Dillons, King Soopers, Mariano’s, Fry’s, QFC and others.
The Enquirer will update this story.
