Kroger chairman Dillon steps down

Longtime Kroger executive and current chairman David Dillon is retiring Dec. 31 after 38 years with the company. Dillon, 63, will be replaced as chairman by Rodney McMullen, who also succeeded Dillon as CEO at the start of 2014, the company said. McMullen has served on the board since 2003.

"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 Companies," McMullen said. "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 Customer 1st Strategy, which Dillon led, consisted of 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, the company said. Dillon served as Kroger's chairman from 2004-14 and as CEO from 2003-13. Prior to that, he held a variety of executive positions at Kroger and Dillons Companies, 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.

Under Dillon’s leadership Kroger has become a trailblazer in supermarket sustainability: It has reduced energy consumption in stores by 35 percent since 2000 and reduced its carbon footprint by 4.4 percent since 2006. And more than half of the company's 37 manufacturing facilities are zero waste. Kroger also invested in technology. To understand better what customers want, Kroger formed a joint venture in 2003 with London-based consumer insight-research firm dunnhumby, called dunnhumbyUSA, in Ohio. Other improvements under Dillon’s watch included innovations like Que Vision technology, which tracks customer traffic via infrared sensors and tells store managers how many cashiers and baggers to call up front. The program has cut the average wait to reach the checkout to 26 seconds from four minutes in 2010. The grocer also expanded its network of Marketplace stores, a larger format store that offers some general merchandise like Walmart, but also broader food options.

Kroger employs more than 375,000 associates who serve customers in 2,631 supermarkets and multi-department stores in 34 states and the District of Columbia.