Dillon Era Closes at Kroger
Four decades of industry leadership that included steering The Kroger Co. to new heights as the country’s largest traditional grocer came into perspective this week as David Dillon retires as chairman of the board at the Cincinnati-based retail giant.
“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,” said Rodney McMullen, who succeeded Dillon as Kroger’s CEO a year ago. “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 Companies. 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’s board of directors elected McMullen, a director since 2003, as its new chairman, effective Jan. 1. Dillon’s retirement kicks in on Dec. 31, after 38 years of service with the grocery industry that began with the Kansas-based Dillons Cos., which merged into Kroger in 1983.
Growth Under Dillon
Kroger’s chairman since 2004, Dillon served as CEO from 2003 to 2013 after holding a variety of executive positions at Kroger and Dillons. 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. Also during this time, Kroger was honored twice by Progressive Grocer as its Retailer of the Year, in 2009 and 2013.
As part of the Customer 1st Strategy, Dillon and McMullen, then serving as vice chairman, 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. 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.
Also 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 – 4 million meals per week – in 2013.
Aufreiter Elected to Kroger Board
Also this week at Kroger, Nora Aufreiter was elected to the company’s board of directors.
Aufreiter is director emeritus of global management consulting firm McKinsey & Co., where she spent 27 years in roles of increasing responsibility including 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, until her retirement last June.
“We are delighted to welcome Nora to Kroger,” Dillon said at his final meeting as Kroger’s chairman. “With her broad business experience and consumer and digital expertise, Nora will be a great addition to Kroger’s board.”
Aufreiter will serve until Kroger’s annual meeting in June, when she will stand for election by shareholders.
Kroger operates 2,631 supermarkets and multidepartment stores in 34 states and the District of Columbia under two dozen local banner names including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry’s, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith’s.