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Key Takeaways
- Melius Research found that Kroger would be able to better compete with Walmart if they brought in some new leadership, such as former Walmart executives.
- The analysts suggested tapping Greg Foran, former CEO of Walmart's American division, as CEO.
- They also put forward two candidates for Kroger's Board of Directors in a note published Friday.
Kroger had big merger plans. One research team believes that now that the merger plans are over, Kroger (KR), the grocery chain, needs to re-assemble its team.
Melius Research published a note on Friday that suggested a former Walmart employee might be the best person to help Kroger deal with the current situation. The analysts have named CEO and board members they believe can help Kroger retain grocery customers who have been moving their business to the retail titan. Kroger attempted to compete against Walmart by merging Albertsons with ACI, but abandoned the idea after a judge blocked the deal last year.
Melius said Greg Foran – former CEO of Walmart America – would be an excellent replacement for Rodney McMullen. McMullen resigned earlier this month as CEO following a probe into the conduct of his behavior. Analysts said that Foran helped a “floundering Walmart” get its feet.
The grocer named an interim McMullen replacement and hired a search company to find their replacement.
"The turnover in the c-suite is a concern," the analysts said. "There has been ongoing uncertainty for employees and [Kroger's] strategy."
Melius suggested a new board that would include former Walmart executive Roger Davidson (who runs an advisory firm focusing on food markets) and Mike Schlotman (who previously held the CFO and other leadership roles at Kroger).
Kroger has announced that it will invest in lower pricing and better pay for its employees. Melius supported this strategy by saying: “Price is important and the price creep in grocery stores is unacceptable.” [Kroger] “This is not acceptable.”
