It’s been a big week for Kroger, which announced the sudden resignation of its CEO Rodney McMullen and reported fourth quarter and full-year earnings days later.
Rodney McMullen, a Kroger vet who started as store clerk in 1978, resigned after “a board investigation of his personal conduct” found his actions didn’t align with the company’s business ethics policy, the company said. Kroger noted his actions didn’t involve other Kroger employees. McMullen lost over $11 million in unvested stock and options as a result, per the Cincinnati Enquirer.
Kroger’s would-be business partner Albertsons, too, announced its CEO’s departure on the same day as McMullen’s resignation. Vivek Sankaran, the chain’s leader since 2019, will leave on May 1 as part of a planned retirement, after which COO Susan Morris will assume his role. The executive moves come after the grocery chains’ ill-fated attempt to merge, which ended in termination, and ultimately a lawsuit, last year.
Kroger appointed lead director Ronald Sargent as its interim CEO as it searches for McMullen’s replacement. Days after the announcement, Sargent, alongside interim CFO Todd Foley, led the company’s fourth quarter and full year 2024 earnings.
The call didn’t shed additional light on the circumstances surrounding McMullen’s resignation, and Sargent noted it’s considering internal and external candidates for the role. Sargent said Kroger’s board “updates our specs for CEO every year,” due to the changing nature of the grocery business.
During the call, Foley told investors he anticipates inflation of 1.5%–2.5% this year, not including the impact of tariffs, which he downplayed. Tariffs will likely hit its fresh product business, but not take a notable toll, though its merchandising team has been “proactive” in sourcing goods from countries affected by the tariffs.
As Kroger looks for further “margin enhancement initiatives” its Our Brands private selection has been a highlight, with 90% of customers buying these products last year. It launched 900 products last year, and growth outpaced national brands, Foley said, as “all customer cohorts are looking for value.” The company has been conducting “category deep-dives” to identify opportunities for additional innovation, finding areas of “substitutability or replaceability relative to national brands,” he said.
The company, which notched 2.4% sales growth in Q4, forecasted 2% to 3% sales growth for full year 2025.
Retail news that keeps industry pros in the know
Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.