THE FRIDAY 5: New CEOs at Kroger, Albertsons; The Looming Threat of Tariffs

1. CEOs Step Down at Kroger and Albertsons

The week started out with a bang as news broke that Kroger CEO Rodney McMullen was stepping down from the company’s top spot following an internal investigation into his personal conduct. While Kroger asserts that McMullen’s alleged breach of corporate ethics was not related to the business, including its financial performance, operations, reporting or talent, further information on his ouster has not been forthcoming.

Ron Sargent, lead director of Kroger’s board of directors, was appointed to serve as CEO and chairman of the board on an interim basis. During the company’s Q4 earnings call this week, Sargent said Kroger has hired a nationally recognized search firm and will look at internal and external candidates to replace McMullen on a permanent basis.

Later on Monday, it came to light that Albertsons Cos. CEO Vivek Sankaran was also vacating his top grocery role. Albertsons revealed a CEO succession plan under which Susan Morris, currently EVP and COO, will assume the role of CEO following the planned retirement of Sankaran on May 1. During the transition period, Morris will work closely with Sankaran to continue carrying out the grocer’s Customers for Life strategy. On the effective date, Morris will also join Albertsons’ board of directors, succeeding Sankaran.

2. Publix Faces Deceptive Pricing Lawsuit Amid Q4 Revenue Gains

Readers were interested this week in news that a Florida woman has filed a class action lawsuit against Publix, alleging deceptive pricing practices at self-checkout. The lawsuit claims that Publix manipulated the weights of food products sold by weight — such as meats, cheeses and deli items — through its POS system at five Tampa locations.

The lawsuit is a class action on behalf of all consumers. It asks for damages not only for the plaintiff, but also for all Publix shoppers allegedly overcharged at checkout. 

Publix told PG that it "would be inappropriate for us to comment on pending litigation."

Meanwhile, the grocer shared this week that its sales for fourth quarter ended Dec. 28 were $15.5 billion, a 5.5% jump from the $14.7 billion logged in 2023. Comparable-store sales increased 4.1%. For fiscal year 2024, Publix’s sales were $59.7 billion, a 4.6% increase from $57.1 billion in 2023. Comps for FY2024 increased by 2.9%.

[RELATED: Inside the 1st Publix in Lexington]

3. The Looming Threat of Tariffs

President Donald Trump officially implemented 25% tariffs on goods imported from Canada and Mexico on Tuesday. The president also imposed an additional 10% tariff on Chinese imports, doubling the 10% duty that he placed on Beijing in early February.

By Thursday, however, the president postponed tariffs on many imports from Mexico and some imports from Canada for a month.

The financial burdens of these tariffs, regardless of when or if they take effect, are expected to be passed onto inflation-weary shoppers — especially in America's grocery stores. Leaders from both the National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) expressed concern over the move. 

In a statement, NRF’s EVP of Government Relations David French said: “The decision to impose tariffs on our North American neighbors and two of our largest trading partners is a significant measure. Unfortunately, it is one that will only hurt hardworking Americans and the businesses that strive to provide customers with the products they want and need on a daily basis.

“Tariffs are just one tool at the administration’s disposal to achieve a secure border, and we urge it to explore other options to accomplish the same goals. As long as these tariffs are in place, Americans will be forced to pay higher prices on household goods,” French continued. “We urge the Trump administration and our Canadian and Mexican counterparts to work together to quickly resolve our outstanding border security issues.”

4. BJ’s, Sprouts Plan for Expansion in Key Markets

On the heels of a successful Q4, ever-growing BJ’s Wholesale Club released big plans to expand its footprint over the next two years, opening 25-30 new clubs. Most notably, it has plans for several clubs in the Dallas-Fort Worth area starting in early 2026 – a new market for BJ’s. 

“We are eager to continue our expansion by bringing unbeatable value, convenience and assortment to the Dallas-Fort Worth community,” said Bob Eddy, chairman and CEO of BJ’s Wholesale Club. “Economic expansion and a growing population make Texas a great fit for us. We believe our unique club model, which delivers savings of up to 25% off grocery store prices every day, will resonate with the families in this area. We look forward to living our purpose of ‘taking care of the families who depend on us’ in Texas.”

Sprouts Farmers Market, meanwhile, is also readying for expansion. The natural grocer plans to open 35 new stores in FY2025, including at least seven in Florida. Sprouts is also currently preparing new store openings in Colorado and California.

5. Target Aims for $15B in Sales Growth by 2030

While Target CFO Jim Lee reported this week that the company will remain “appropriately cautious” with its expectations for 2025, its leadership and teams are hard at work on strategies and tactics to steer the best performance possible. 

Among other business aspects, the retailer is focusing on on-trend affordable assortments, omnichannel discovery, enhanced supply chain and fulfillment capabilities, expanded Target Circle membership and strategic partnerships. Investments in these areas aim to accelerate Target's strategy and drive more than $15 billion in sales growth by 2030.

While Target saw better-than-expected sales and profitability in its fourth quarter, the retailer is anticipating a tough quarter ahead due to consumer uncertainty and the ongoing threat of tariffs.