Dj Kroger Can Make Best Of Executive Shift After Blocked Albertsons Deal - Market Talk

Kroger's longtime CEO Rodney McMullen exit represents both an opportunity and a challenge after its merger with Albertsons was blocked, Morgan Stanley analysts say in a research note after meeting with Kroger's Investor Relations and departing CFO Todd Foley. This situation could make Kroger's management under the leadership of Ron Sargent as interim CEO rethink its pricing, merchandising and digital strategies company. Sargent will also be of value during this transition, who will start working with incoming CFO David Kennerley. "We think the combination of both a CEO and CFO transition at the same time opens the possibility of a more holistic review of Kroger's strategy and investment priorities," the analysts add. (sabela.ojea@wsj.com; @sabelaojeaguix)

By Sabela Ojea

Albertsons Chief Executive Officer Vivek Sankaran, who sparred with regulators over the grocery chain's deal to merge with Kroger, is stepping down.

Susan Morris, Albertsons' operating chief, will succeed Sankaran, effective May 1, and join its board of directors. The Boise, Idaho-based retailer said Monday Sankaran's departure is part of a planned retirement.

The disclosure of Sankaran's impending departure comes the same day Kroger said CEO Rodney McMullen would resign after an investigation into his personal conduct. Sankaran has headed Albertsons since April 2019 and helped lead efforts to combine the grocery chain with Kroger in a deal that was eventually struck down by the Federal Trade Commission. Sankaran was previously an executive with PepsiCo.

His successor, Morris, has been operating chief of Albertsons since January 2018. She is as an industry veteran with nearly four decades of experience in the retail grocery sector.

"The board is confident that Susan is the ideal person to lead the company into its next chapter of growth," Chair Jim Donald said, adding that the election of Morris as CEO follows a thoughtful succession planning process that evaluated both internal and external candidates.

Morris said her appointment comes at a time of profound change for the grocery industry.

Last year, as court proceedings around the merger ensued, Sankaran warned regulators that Albertsons would have to consider closing stores or laying off workers if a judge rejected Kroger's planned $20 billion takeover, as Walmart and Amazon continued to take market share from the grocery chain.

Albertsons also on Monday backed its outlook for the year. The company is expected to report fourth-quarter earnings April 28, according to FactSet.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix