After an investigation into his own conduct, Kroger CEO Rodney McMullen suddenly resigned after decades of service with the supermarket giant. While his actions were unrelated to Kroger’s business operations and did not involve company staff, the company stated on Monday that the probe, conducted by outside attorneys, concluded they did not meet its ethical standards.
The board moved quickly once it became aware of the claims on Feb. 21, naming Kroger’s lead director Ronald Sargent as interim CEO. Sargent, who has been a member of Kroger’s board since 2006 and lead director since 2017, has considerable leadership experience. He spent 27 years at Staples, holding the CEO post from 2002 to 2016.
In a statement, Sargent stressed his dedication to ensuring stability while proactively directing the firm’s strategy. But neither Kroger nor McMullen has given additional information or public comments on the events behind his resignation.
McMullen’s tenure with Kroger started in 1978 when he joined the company as a part-time stock clerk in Lexington, Kentucky. McMullen gradually advanced through the ranks, working at different senior capacities such as vice president of planning and capital management, chief financial officer, and chief operating officer, prior to becoming CEO in 2014. A year later, he was elected as chairman.
Due to his sudden exit, McMullen will also lose his 2024 bonus and any unvested equity awards, as per company documents. In 2023, his overall compensation was $15.7 million, including stock and option awards, dividend payments, and other compensation.
Over his time at Kroger, McMullen was instrumental in growing the company’s footprint through strategic mergers and acquisitions, leading to it becoming the nation’s largest traditional supermarket chain. Kroger now has over 2,700 locations across 35 states and Washington, D.C., operating under multiple banners including Ralphs, King Soopers, Harris Teeter, and Fred Meyer. Kroger reported $150 billion in revenue for fiscal 2023 and will announce its fourth-quarter and fiscal 2024 earnings on Thursday.
During McMullen’s reign, Kroger saw a great change in culture. In 2017, he brought reforms to the organizational purpose of the company, and in 2020, he led the implementation of diversity, equity, and inclusion (DEI) policies. Spencer Harrison, an associate professor at INSEAD and an Academy of Management scholar, pointed out McMullen’s role in changing the company’s culture and values.
His resignation follows just a few months after a serious legal blow. A federal judge stopped Kroger’s planned merger with Albertsons in December, aligning with the Federal Trade Commission’s fears that the transaction would decrease competition and increase prices. Another Washington state judge’s ruling stopped the merger after a court challenge by the state attorney general. If it had proceeded, the $24.6 billion transaction would have been the largest supermarket merger in American history.
As a reaction to the merger collapse, Albertsons declared that it would cancel the deal and sued Kroger, charging it with not doing enough to obtain approval from the regulators. The suit is requesting billions of dollars in damages, adding to Kroger’s woes.
Pablo Garces, director of retail at S&P Global Ratings, added that Sargent now is under increased pressure to remake the company’s goals in light of economic volatility and the impact of the failed merger.
McMullen’s exit also fits into a larger pattern of CEO exits. Leadership consulting firm Russell Reynolds Associates counted a record 202 CEO exits in 2024, fueled by changing workplace dynamics, activist investors, and economic uncertainty. Experts anticipate the trend to continue in 2025, with CEO exits already 50 percent higher than the same time last year.
Cary Cooper, a professor of Manchester Business School and an Academy of Management scholar, explained that the majority of CEO resignations are due to internal power struggles, underperformance, or disagreements with the board over strategic choices like mergers and acquisitions.
With McMullen’s exit, Kroger has to navigate leadership transitions, legal matters, and a tough economic climate in an uncertain future. The next move of the company after this sudden change will be decided in great part by the process of finding a new CEO.
