UFCW Unions Call for Kroger CEO Replacement

(Reuters) – Some United Food and Commercial Workers (UFCW) local unions urged Kroger (NYSE:KR)'s board to replace CEO Rodney McMullen on Friday. This follows the company's announcement of a $7.5 billion stock buyback plan after terminating a deal to buy Albertsons (NYSE:ACI).

The UFCW local unions that led the "Stop the Merger coalition" argued that the "abrupt" and "massive" share repurchase program is ill-timed, as Kroger requires investments in staffing, repairs, and store remodels.

Kroger and Albertsons canceled their $25-billion merger plan after a U.S. judge blocked the deal on Wednesday. Following this, Albertsons filed a lawsuit against Kroger for breach of contract that contributed to the merger's failure.

Kroger announced a new repurchase program on Wednesday and plans to engage in an accelerated share buyback program worth about $5 billion of common stock.

Kim Cordova, president of UFCW Local 7 in Colorado and Wyoming, criticized McMullen, stating, "It is outrageous that Rodney McMullen would try to distract attention from his multiple failures as CEO by announcing a massive one-time giveaway to shareholders."

In response, a Kroger spokesperson stated, "Statements from UFCW locals leaders, who are in the midst of CBA (collective bargaining agreement) negotiations, mischaracterize Kroger's actions and intent."

The Kroger spokesperson also noted that with the merger agreement terminated, the company was able to resume share repurchases that had been paused since the merger talks began in 2022.