David B. Dillon, who led The Kroger Co. leadership team’s development of the company’s successful Customer 1st Strategy, will retire as chairman of the board Dec. 31 after 38 years of service.
As expected, Kroger’s board of directors has elected Kroger CEO Rodney McMullen to the additional post of chairman commencing on Jan. 1. McMullen has served on the board of directors since 2003.
Dillon has served as Kroger’s chairman since 2004 and was CEO from 2003-2013. Prior to that, he held a variety of executive positions at Kroger and Dillons Cos., which merged in 1983. During his tenure as CEO, Kroger grew revenue by $45 billion, created 53,000 new jobs, reduced costs for eight consecutive years and returned $9.2 billion to shareholders through share repurchases and dividends, which were reinstated in 2006.
As part of the Customer 1st Strategy, Dillon and McMullen, who was then serving as vice chairman, created and executed a long-term price investment strategy that has enabled Kroger to deliver sustainable business growth and shareholder returns, while also saving customers nearly $3 billion annually through lower prices, according to the company. This laid the foundation for Kroger’s growth plan, announced in October 2012, which expands the Customer 1st Strategy by: accelerating growth in Kroger’s core business and improving the company’s connection with all customers; expanding Kroger’s presence in new and existing markets; and innovating to create unique competitive positioning for today and the future.
Kroger also has become a leader in supermarket sustainability under Dillon’s leadership. The company has reduced energy consumption in stores by 35 percent since 2000 and reduced its carbon footprint by 4.4 percent since 2006. More than half of the company’s 37 manufacturing facilities are zero waste. Kroger’s efforts to feed families struggling with hunger have grown to total contributions of 250 million meals—four million meals per week—in 2013.
“For Dave, Customer 1st—which truly put our customers at the center of how Kroger runs its business—was more than a successful business strategy. It was a philosophy that he believed and lived through his actions every day, and as a result he inspired thousands of our associates during his many years of service to Kroger and Dillons Cos.,” said McMullen. “He understood that Kroger’s greatest asset is the trust that our customers, associates and shareholders have in our company. We are all the beneficiaries of Dave’s extraordinary leadership.”
Kroger elects Nora A. Aufreiter to board
In related news, Nora A. Aufreiter has been elected to The Kroger Co.’s board of directors.
Aufreiter is director emeritus of McKinsey & Co., a global management consulting firm. She had roles of increasing responsibility during her 27 years with the firm, including serving on its global personnel committees. Her roles included leading the firm’s North American Retail Practice, North American Branding service line, McKinsey’s Toronto office and the firm’s Consumer Digital and Omnichannel service line, which she led until her retirement in June 2014.
“We are delighted to welcome Nora to Kroger,” said Dillon. “With her broad business experience and consumer and digital expertise, Nora will be a great addition to Kroger’s board.”
Aufreiter is a member of the board of directors of Scotiabank and Neiman Marcus Group. She serves on the boards of St. Michael’s Hospital and the Canadian Opera Co. and is a member of the Dean’s Advisory Board for the Ivey Business School in Ontario, Canada. She is a graduate of the Harvard Business School.
Aufreiter will serve until Kroger’s annual meeting of shareholders in June 2015. At that time, she will stand for election by the company’s shareholders.