Kroger Needs a CEO to Help It Compete With Walmart. These Analysts Have Ideas

Kroger had big merger plans. Now that those are off, one research team says the grocery chain needs to stack its team with people who can help Kroger (KR) contend with Walmart (WMT).

A Walmart alum might be particularly well-suited to help Kroger meet the moment, Melius Research said in a note published Friday. The analysts named CEO and board candidates, they believe could help Kroger keep customers who have been shifting their grocery business to the retail giant. Kroger sought to compete with Walmart by merging with Albertsons (ACI), but abandoned the idea last year after a court blocked the deal.

Melius said Greg Foran, former CEO of Walmart’s American division, would be a good replacement for Rodney McMullen, who resigned as CEO earlier this month in the wake of a probe into his conduct. Foran helped a “floundering” Walmart get its footing, the analysts said.

The grocer earlier this month named an interim replacement for McMullen and said it had hired a search firm to find its replacement.

“The turnover in the c-suite is a concern,” the analysts said. “There has been ongoing uncertainty for employees and [Kroger’s] strategy.”

Melius suggested overhauling the board, adding former Walmart executive Roger Davidson, who runs an advisory firm focused on food markets, and Mike Schlotman, who previously held CFO and other leadership posts at Kroger.

Kroger has said it would move forward by investing in lower prices and better pay for employees. Melius backed this strategy, saying: “Price matters and the price creep at [Kroger] has been consistent and is not acceptable.”