CINCINNATI—The Kroger Company announced on March 3 that Chairman and Chief Executive Officer Rodney McMullen has resigned from the Company following a Board investigation of his personal conduct that, while unrelated to the business, was inconsistent with Kroger’s Policy on Business Ethics.
The Board has appointed Lead Director Ronald “Ron” Sargent, 69, to serve as Chairman of the Board of Directors and interim Chief Executive Officer, effective immediately. The Board also announced that Mark Sutton will serve as Kroger’s lead independent director, also effective immediately.
Background: Resignation of Rodney McMullen
On February 21, the Board was made aware of certain personal conduct by Mr. McMullen and immediately retained outside independent counsel to conduct an investigation, which was overseen by a special Board committee. Mr. McMullen’s conduct is not related to the Company’s financial performance, operations or reporting, and it did not involve any Kroger associates.
The Board of Directors has formed a Search Committee and engaged a nationally recognized firm to conduct a search for Kroger’s next CEO. Mr. Sargent has agreed to serve in his role until the appointment of the next CEO.
“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,” said interim Chief Executive Officer Ron Sargent. “Kroger has been a special place throughout my retail career after spending summers in college working in stores, as well as my first ten years after business school at corporate headquarters, before more recently serving as lead independent director. My decades here have given me a full appreciation of what makes Kroger unique, and I am excited to work even more closely with this talented team. I plan to be a steady, but active hand in the execution of our strategy.”
Mr. Sargent has been a Kroger director since 2006 and has served as the lead director of Kroger since 2017. He spent the first ten years of his professional career at Kroger, working in several roles across stores, sales, marketing, manufacturing and strategy. Mr. Sargent is a veteran retail operator and leader with 35 years of experience, including as the Chairman and CEO of Staples, Inc. from 2002 to 2016 after joining the company in 1989. He currently serves on the board of Wells Fargo & Company, where he is Chair of the Human Resources Committee, and the board of Five Below, Inc. In connection with his new role, Mr. Sargent will step down from his service on the Audit Committee, the Corporate Governance Committee and the Public Responsibilities Committee.
“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. “Kroger will continue to deliver for our customers, invest in our associates, strengthen our communities, and reward our shareholders under Ron’s leadership.”
Kroger expects full-year Identical Sales without fuel to be at the high end of its guidance range and full-year Adjusted Earnings Per Share to be slightly above the high end of its guidance range. The Company will report its fourth quarter and full-year 2024 results, as well as full-year 2025 guidance, during its fourth quarter 2024 earnings conference call at 10:00 a.m. ET on Thursday, March 6, 2025.
Kroger and Albertsons $25 billion mega-merger blocked, Albertsons sues
A day after a federal judge blocked the $25 billion merger of grocery giants Albertsons and Kroger, Albertsons filed a multi-billion-dollar lawsuit against Kroger for breach of merger agreement on December 11, 2024. The companies are still embroiled in a legal dispute over the fallout.
The lawsuit filed in the Delaware Court of Chancery, is bringing claims for willful breach of contract and breach of the covenant of good faith and fair dealing alleging that Kroger failed to exercise “best efforts” and to take “any and all actions” to secure regulatory approval of the companies’ agreed merger transaction, as was required of Kroger under the terms of the merger agreement between the parties.
In a press release by Albertsons, it alleged that Kroger repeatedly refused to divest assets necessary for antitrust approval, ignored regulators’ feedback, rejected stronger divestiture buyers and failed to cooperate with its partner Albertsons.
In a statement released Wednesday, December 11, 2024, Kroger refuted these allegations and alleges that Albertsons “repeated intentional material breaches and interference throughout the merger process” which the company said will be proven in court.
King County Superior Court Judge Marshall Ferguson ruled on December 10 that the proposed merger of grocery giants Kroger and Albertsons is unlawful and cannot go forward. The decision came following a September trial in Attorney General Bob Ferguson’s antitrust case challenging the merger.
Earlier on that same day, Oregon U.S. District Judge Adrienne Nelson issued a temporary injunction ruling that the $24.6 billion Kroger-Albertsons merger would limit competition and harm consumers.
Judge Nelson said that supermarkets Kroger and Albertsons are “distinct from other grocery retailers” and are not direct competitors to Walmart, Amazon and other companies who sell non-grocery goods.
“The overarching goals of antitrust law are not met,” Judge Nelson wrote in the decision.
Albertsons alleges that the courts’ rulings could have been avoided if it weren’t “for Kroger’s breaching conduct.”
Source: Press release from Kroger with additions by the Lynnwood Times.
Author: Lynnwood Times Staff
