Good morning. Fortune 500 companies are increasingly hiring external talent for CFO roles.
One of the latest such moves is Kroger Co. hiring PepsiCo’s David Kennerley as its new finance chief. Supermarket giant Kroger announced on Wednesday that Kennerley will officially begin as CFO on April 3. But he will join Kroger on March 10 as senior vice president, while interim CFO Todd Foley continues through the end of Kroger’s fiscal year 2024 reporting cycle. Former CFO Gary Millerchip left the company about a year ago to join Costco as finance chief.
In a statement, Kennerley cited the opportunities he had at PepsiCo over the last 24 years as “instrumental in paving the way for my new role as the CFO of Kroger.”
Kennerley joined PepsiCo in 2001 and has served as senior vice president and CFO for PepsiCo Europe since March 2020. Over the years, Kennerley held roles such as senior finance director of its Global Beverages Group, and leadership roles in the North American business.
Staying competitive
Kroger Co., No. 25 in the Fortune 500, operates thousands of U.S. supermarkets, under brands including Kroger, Ralphs, and Fred Meyer. In addition to more than 2,700 grocery stores, the company has thousands of fuel centers and pharmacies and, as of 2024, employs more than 412,000 associates across the U.S.
As incoming CFO, Kennerley will need to focus on areas that could weigh on the profits in the future, like intense competition, according to Noah Rohr, an equity research analyst at Morningstar. “We’ve seen competition within the supermarket sector heat up over the last couple of years,” he told me.
“Some of Kroger’s lower-priced peers, like Walmart, and Costco are doing really well,” Rohr explained. Traditional supermarkets like Kroger or Albertsons continue to compete with mass merchandise and warehouse club channels, he said.
In 2022, Kroger announced it would pay $24.6 billion for Albertsons in a proposed merger. It was set to be the largest grocery store merger in U.S. history. But in December, courts blocked the deal siding with the U.S. Federal Trade Commission’s argument the merger would lead to higher prices for shoppers. Albertsons then sued Kroger alleging a breach of contract that caused the deal’s demise.
Kroger sources many of its foods from the U.S., compared to some of its big retail competitors, Rohr said. In Q3 2024, Kroger beat same-store sales expectations due to a surge in customer demand for its lower-priced and freshly sourced groceries at stores and online.
Proposed tariffs against countries like Mexico may not have a direct impact on Kroger, Rohr said. However, there could be a “knockdown effect” when consumers in general “feel the effects of tariffs in other areas, like electronics or auto parts, and therefore they become more value-conscious at the grocery level,” he said.
Rodney McMullen, Kroger’s chairman and CEO, noted Kennerley’s qualities as he has “deep experience leading a broad-cross section of U.S. and international finance teams,” he said in a statement. In other words, a strategic CFO hire.
You can read about more of the latest Fortune 500 Power Moves here.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Bob Foster was promoted to CFO of Paycom Software, Inc. (NYSE: PAYC), effective Feb. 21. He succeeds Craig Boelte, who is retiring after leading Paycom’s finance and accounting efforts for nearly 20 years. Foster joined the company in 2022 to lead Paycom’s growth strategy and later served as EVP of accounting and finance.
Deepa Subramanian was named CFO of DailyPay, a work-tech platform. Ken Brause, who served as CFO since November 2023 has been appointed chief administrative officer. Subramanian most recently served as VP of corporate finance and investor relations at Uber Inc. Before that, Subramanian held the role of CFO for Uber’s Delivery (Eats) business. She previously spent more than a decade serving in a range of operating and finance roles at JPMorgan Chase.
Big Deal
The U.S. Labor Department’s report released on Wednesday showed the consumer price index increased 3% in January from a year ago, up from 2.9% the previous month, as the cost of groceries, gasoline, and rent rose. Consumer prices have increased from a three-and-a-half-year low of 2.4% in September.
The data finds that inflation has remained above the Federal Reserve’s 2% target approximately for the past six months, after it fell steadily for about a year and a half.
Due to the ongoing avian flu pandemic, egg prices are expected to continue increasing. Overall grocery prices only increased by 1.9% on average, with some categories such as fruits and vegetables remaining just about the same price that they were a year ago, Fortune reported.
Going deeper
“Robinhood hits record $1 billion in Q4 revenue, boosted by 500% jump in crypto fees” is a new report by Fortune’s Ben Weiss. The online brokerage and trading app announced on Wednesday a record-breaking quarter for profit and revenue. Crypto revenue rose to a record $358 million in Q4, and overall revenue skyrocketed 37% to $1.01 billion from the previous quarter. “We hit the gas on product development in 2024,” Vlad Tenev, the CEO of Robinhood, said in a statement.
Overheard
“It is with heavy hearts that we inform you that Duo, formally known as The Duolingo Owl, is dead. Authorities are currently investigating his cause of death and we are cooperating fully. Tbh, he probably died waiting for you to do your lesson, but what do we know.”
—Language-learning app Duolingo announced across social media platforms on Tuesday that Duo, its green owl logo, is no longer. Although part of a brand marketing campaign, killing off a mascot is always a tricky thing. While corporate executives might hate it, some users might have a connection to it, Fortune reported.