Kroger Chairman and CEO Rodney McMullen has resigned following an internal investigation into his personal conduct, the company announced Monday. The nation's largest grocery chain stated that while the investigation was unrelated to business matters, McMullen's actions were found to be inconsistent with the company's ethics policy.
Ronald Sargent, a longtime Kroger board member, has been appointed as chairman and interim CEO, effective immediately. Sargent, who has served on the company's board since 2006 and as lead director since 2017, brings extensive experience in retail leadership. He previously served as chairman and CEO of Staples and has held multiple roles within Kroger, spanning stores, sales, marketing, manufacturing, and strategy.
McMullen, 64, has had a long tenure at Kroger, beginning his career in 1978 as a part-time stock clerk and bagger at a Lexington, Kentucky store. He climbed the ranks, becoming chief financial officer in 1995, chief operating officer in 2009, and CEO in 2014. He assumed the role of chairman the following year.
Kroger's board was alerted to the situation on February 21 and promptly engaged an independent counsel to conduct an investigation, overseen by a special board committee. The company emphasized that McMullen's conduct did not affect Kroger's financial performance, operations, or reporting and did not involve any other company employees.
As Kroger initiates a search for a permanent CEO, Sargent will remain in the interim role until a successor is named.
The announcement had an immediate impact on the market, with Kroger shares falling more than 3.5% ahead of Monday's opening bell.
McMullen's departure comes at a challenging time for Kroger as it continues to navigate the fallout from its failed merger attempt with Albertsons. The proposed $24.6 billion deal, which would have been the largest supermarket merger in U.S. history, was blocked in December by two judges who cited concerns about reduced competition and potential price increases. In the aftermath, Albertsons sued Kroger, alleging that the company did not make sufficient efforts to secure regulatory approval for the merger.
Kroger now faces the dual task of finding new leadership while repositioning itself in the competitive grocery market following the collapsed merger deal.
