US grocery giant Kroger has announced the immediate resignation of its chair and chief executive officer Rodney McMullen following an investigation into his personal conduct.

The Cincinnati-based company said that the board became aware of "certain personal conduct" by McMullen on 21 February and immediately launched an investigation with outside independent counsel.

While Kroger did not disclose details of the misconduct, it stated that it was "inconsistent" with company policies but unrelated to financial performance or operations and did not involve any Kroger associates.

"The conduct is not related to financial performance, operations or reporting, and it did not involve any Kroger associates," the company said in a statement.

Lead director Ronald Sargent has been appointed interim chief executive officer while the board conducts a search for a permanent replacement. Sargent, 69, has been a director since 2006 and previously served as chief executive officer of Staples Inc.

"McMullen stepping down certainly puts Kroger in a vulnerable position. The company is already dealing with the aftermath of its abandoned Albertsons merger, and a leadership change at this stage can complicate things," said Riley Beam, managing attorney at Douglas R. Beam. "For investors, the risk is obvious — uncertainty."

The departure marks the end of McMullen's decade-long tenure as chief executive officer and 46-year career with the company, which began in 1978 when he joined as a part-time stock clerk in Kentucky.

McMullen will forfeit all unvested equity awards and will not be eligible for his 2024 bonus, the company said. He received total compensation of $15.71 million for fiscal year 2023.

The surprise ouster comes just months after Kroger terminated its two-year effort to buy rival Albertsons in a $25 billion deal in December. Albertsons has since sued Kroger for an alleged breach of contract related to the failed merger.

Despite the leadership upheaval, Kroger said it expects full-year identical sales to be at the high end of its guidance range, with adjusted earnings per share likely to be slightly above the high end of its forecast.

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