Case Study: Rodney McMullen’s Resignation from Kroger — When Ethics and Strategy Collide

Case Study

Rodney McMullen, a Kroger veteran who worked his way up from stock clerk to CEO, abruptly resigned from his position as Chairman and CEO of The Kroger Co. on March 3, 2025. The departure followed an internal ethics investigation that revealed conduct inconsistent with company policies. Coming on the heels of a failed merger with Albertsons and amid Kroger’s ongoing digital transformation, McMullen’s exit marked a significant turning point for the company—and a sobering example of how a lack of alignment between leadership behavior and organizational values can undermine even the most accomplished legacy.

Key Milestones in McMullen’s Tenure

• 1978–2014: McMullen rose through the ranks over four decades, gaining widespread respect as a strategic thinker and cultural insider.

• 2014: Appointed CEO of Kroger, ushering in an era of aggressive innovation and expansion.

• 2015–2022: Oversaw key acquisitions, including Harris Teeter, Roundy’s, and Home Chef, cementing Kroger’s presence in new markets.

• 2017–2023: Led Kroger’s digital transformation, with investments in online grocery, data science, and supply chain modernization.

• 2022–2024: Championed the proposed $24.6B merger with Albertsons, which faced increasing scrutiny and eventually failed.

• March 2025: Resigned following a board investigation into personal conduct violations.

What Went Wrong: Layers of Leadership Breakdown

1. Ethical Erosion at the Top

While the nature of McMullen’s ethical breach remains undisclosed, its implications are clear: when a CEO’s actions violate a company’s own code of conduct, the cultural ripple effect can be deeply destabilizing. Ethics aren’t just compliance tools—they’re cornerstones of trust, morale, and decision-making clarity.

Axiom Insight: Leaders set the ceiling for ethical behavior. When the top cracks, the foundation below weakens.

2. Strategic Overreach Without Internal Readiness

The failed merger with Albertsons was more than a missed opportunity—it was a public setback that signaled possible misalignment between ambition and operational readiness. Regulatory pushback, antitrust concerns, and public criticism of potential store closures left Kroger in a vulnerable position, both legally and reputationally.

Axiom Insight: Ambition must be tempered by due diligence, stakeholder alignment, and reputational foresight.

3. Poor Crisis Preparation and Succession Planning

While the board acted quickly to appoint interim CEO Ron Sargent, McMullen’s resignation still caught many off-guard. A company of Kroger’s size should have had clearer contingency plans and communication protocols in place—not just for M&A fallout, but for unexpected leadership exits.

Axiom Insight: Crisis leadership requires more than reaction—it demands scenario planning, transparent culture, and cross-functional trust.

Impact on Kroger and the Industry

• Brand Confidence Wavered: The combination of an ethical investigation and failed merger rattled consumer and investor confidence.

• Leadership Vacuum: The sudden leadership shift created uncertainty at a critical time for Kroger’s digital and operational roadmap.

• Cultural Disruption: Internal morale likely took a hit, particularly among teams involved in M&A and compliance functions.

• Retail Leadership Reckoning: McMullen’s fall served as a reminder to all C-suite executives—legacy does not exempt one from accountability.

What Could Have Been Done Differently

Breakdown	Preventative Action
Ethics Violation	Stronger board oversight, executive coaching, clearer internal escalation pathways
Merger Overreach	More robust scenario planning, earlier stakeholder engagement, risk-weighted pacing
Succession Gaps	Active succession planning, grooming multiple internal candidates, board scenario simulations
Cultural Drift	Ongoing ethics training, culture health audits, psychological safety in feedback loops

Axiom Coaching Perspective: The Leadership Failure Beneath the Headlines

Rodney McMullen’s story isn’t just about personal misconduct or a failed merger. It’s about the slow erosion of alignment—between values and behavior, between strategy and execution, and between perception and reality. For years, McMullen was celebrated for growth and innovation. But leadership isn’t just about scaling empires—it’s about sustaining trust. When a leader’s behavior creates dissonance with the company’s stated values, even strong operational performance can’t buffer the cultural cost.

At Axiom, we see this case as a critical reminder that leadership isn’t just positional—it’s personal. Companies must be willing to invest in ethical reinforcement, leadership resilience, and regular alignment checks to prevent the train from ever going off the tracks.

Final Thought: Leadership fails loudly when accountability is quiet. Ethical missteps rarely begin at the breaking point—they begin when leaders believe they’ve outgrown the rules they helped create.