WSL Future of Health Event

Dillon to leave Kroger poised for more gains

Print Friendly, PDF & Email

At the end the month a remarkable career in mass market retailing will draw to a close when David Dillon steps down as chairman of Kroger Co.

At the end the month a remarkable career in mass market retailing will draw to a close when David Dillon steps down as chairman of Kroger Co.

During a period of tough sledding for most conventional supermarket operators, Dillon, who served as Kroger’s chief executive officer for a decade starting in 2003 and assumed the additional role of chairman beginning a year later, kept the company on course to expand its reach and deliver consistently strong financial ­results.

The Dillon era has been one of robust growth, with revenue increasing from $55 billion to almost $100 billion, making Kroger the nation’s second-largest retailer when measured by domestic sales, while earnings jumped from $314.6 million to $1.52 billion during the fiscal year that ended last February. At the same time, the company rewarded stockholders with $9.2 billion in dividends, which Dillon reinstated in 2006, and share repurchases.

Impressive as they are, the numbers only tell part of the story. Dillon and his colleagues were able to build Kroger’s business at a time when other traditional supermarket operators were pressured by increasing competition from other trade classes for the allegiance of food shoppers, and the emergence of such high-end grocers as Whole Foods on the one hand and discounters like Aldi on the other. What made the difference was Dillon’s intense focus on the people who shop Kroger’s stores.

That orientation is reflected in the company’s Customer 1st Strategy. Instituted early in Dillon’s tenure, the program committed the company to a long-term investment in lower prices, one that saves consumers almost $3 billion a year and, at the same time, enhances customer loyalty. Customer 1st has enabled Kroger to deliver 44 consecutive quarters of identical-supermarket sales increases, excluding the gasoline ­business.

The final piece of Dillon’s legacy is the strong management team that he has put in place. Rodney McMullen, a longtime colleague who succeeded him as chief executive, hasn’t missed a beat in that role. Now that Dillon is retiring after almost four decades in retailing, McMullen will take on the additional duties of Kroger chairman. Based on the track record that the two men have compiled, there’s no reason to think the impressive run at Kroger won’t continue.


ECRM_06-01-22


You must be logged in to post a comment Login