Why Retailers And Grocers Promote From Within

The clearest signal for an internal promotion is stability paired with performance. When a company is operationally sound but simply needs a leadership transition — Walmart, Target, Albertsons, Ulta Beauty — boards almost universally reach for someone who already knows the culture, the vendor relationships, the systems, and the team.

Walmart’s transition is the textbook case. Doug McMillon’s retirement was planned, orderly, and followed by the elevation of John Furner, a 32-year Walmart veteran. Furner’s announcement of his own C-suite reshuffling, promoting David Guggina to Walmart U.S. CEO, shifting Chris Nicholas to Walmart International, was described explicitly as reflecting “a bench of leaders who are deeply grounded in the company’s purpose and values.” That’s not just succession planning language. It’s a philosophy. Walmart’s competitive advantages are operational scale, logistics infrastructure, supplier leverage and are deeply ingrained. Disrupting that institutional memory by going to an outsider carries real cost.

Target and Albertsons made similar calculations. Michael Fiddelke, a long-tenured Target COO, succeeded Brian Cornell. Susan Morris, who has spent nearly 40 years at Albertsons, succeeded Vivek Sankaran. At Ulta Beauty, COO Kecia Steelman was promoted to CEO the same day Dave Kimbell announced his retirement: there was no gap, no search, no uncertainty. The message to employees, vendors, and investors was identical in each case: our leadership pipeline is deep, we have confidence in our direction, and continuity is the strategy.

“Internal promotions send a message to the entire organization that loyalty and performance are rewarded — which matters enormously for morale and retention far below the C-suite.”

There is also a risk calculus that boards rarely articulate publicly, but always weigh privately. An insider is a known quantity. The board has years of performance data. They’ve watched how the person handles adversity, political pressure, and operational crisis. There are no surprises about cultural fit. The failure mode of the insider hire — that they’re too embedded in the existing strategy to see its flaws — is real but manageable. The failure mode of the outside hire is harder to contain.

The Case For Hiring Outside The Company

The outside hire almost always signals one of three things: the board believes the company needs a reset that insiders are either unwilling or culturally unable to deliver; there is no credible internal candidate; or the company’s core challenge requires capabilities that simply don’t exist in the current organization.

Kroger is the defining case of this era. In February 2026, after a nearly year-long search, the company appointed Greg Foran — former head of Walmart U.S., former CEO of Air New Zealand — as its new chief executive. It was the first time in Kroger’s 143-year history that the company had hired a CEO from outside its own ranks. That fact alone should stop every retail executive in their tracks. One hundred and forty-three years of promoting from within, ended by a single board decision. Why?

The failed $24.6 billion merger with Albertsons was a major reason. Another, the abrupt resignation of Rodney McMullen following an ethics investigation. Then there was the obvious: the erosion of competitive position against Walmart, Costco, and hard discounters. Let’s not forget the very expensive $350 million dollar wind-down of the Ocado automated fulfillment network. And for customers it was the closure of health clinics. Kroger didn’t just need a new CEO. It needed a signal to investors, to the market, and to its own workforce that the board understood how serious the situation was. Hiring Foran, who literally helped build the machine that has been beating Kroger for a decade, was that signal. He is a CEO that is focused on the retail experience, employees and e-commerce. Just what Kroger needs in my opinion.

"Kroger didn’t just need a new CEO. It needed a signal — to investors, to the market, to its own workforce — that the board understood how serious the situation was."

Kohl’s and Lululemon round out the outside-or-searching cohort, though for different reasons. Kohl’s terminated Ashley Buchanan early in his tenure after an ethics violation, and ultimately elevated board chairman Michael Bender to the permanent CEO role. An inside-the-boardroom solution when the external hire had failed. Lululemon, facing a 50% share price decline and a very public campaign by founder Chip Wilson criticizing the brand’s loss of identity, is conducting a full external search, with CFO MegCFOhan Frank and CCO André Maestrini serving as interim co-CEOs in the meantime.

What The Data Says About Hiring Patterns

Step back from these individual examples and patterns. The companies that promoted from within in 2024 and 2025 share a profile: operationally strong, strategically clear, with deep leadership benches built over years of intentional development. The companies that went outside share a different profile: a specific failure to reckon with — strategic, ethical, or competitive — that the board had concluded the existing culture could not self-correct.

Russell Reynolds data from 2025 found that 64% of retail CEO departures were unplanned — removals, abrupt exits, and internal role shifts — while only 29% were part of a planned succession. That means most retail boards are not making this inside-versus-outside decision from a position of strategic clarity. They’re making it under pressure, often in crisis, with perhaps imperfect information and, certainly a compressed timeline.

"There is an uncomfortable asymmetry in how failure is attributed. When an inside hire struggles, the board is blamed. When an outside hire struggles, the individual is blamed — which makes outside hires politically safer for boards, even when they’re operationally riskier for the company."

The Grocery-Specific Dilemma

Grocery and mass retail are operationally complex businesses where execution at the store level is everything. The last mile, in-stock position, associate behavior, cleanliness, checkout speed, fresh department quality all are where competitive battles are actually won and lost. That operational density tends to favor insiders who have lived in the business and understand its rhythms at a granular level.

But when the strategic challenge shifts to digital transformation, e-commerce buildout, retail media monetization, or brand repositioning, those capabilities that legacy retail organizations frequently lack, the outside hire becomes more compelling precisely because the incumbent culture is part of the problem. Remember, you cannot ask the team that built the existing system to dismantle it. The organizational immune system will reject the change every time.

Foran’s appointment at Kroger sits at this exact intersection. The board needed someone who could upgrade store-level execution and accelerate digital simultaneously. They found a candidate who had already done both for the chain’s main competitor. His outsider status at Kroger is not incidental. It is the point.

Hiring Decisions Come Down To Four Questions

For any board wrestling with this decision, the honest framework comes down to four questions.

First: is the company’s core strategy sound, or does the strategy itself need to change? If the strategy is sound, the insider almost always wins. If the strategy needs to change, the outside hire becomes necessary — because changing strategy requires changing culture, and culture change from within is extraordinarily rare.

Second: does the board have genuine confidence in the internal bench, or has it been quietly managing around a leadership development deficit for years? The answer to that question is usually already known. The crisis just forces honesty about it.

Third: how much integration time can the company afford? In a stable environment, the outside CEO’s learning curve is manageable. In a volatile one — tariffs, competitive disruption, consumer uncertainty — six months of integration lag can be expensive.

Fourth: what signal does this decision send? CEO succession is never just an operational choice. It is a communication to employees, investors, vendors, and competitors about what the board believes is true about the company’s situation. Kroger’s outside hire said: we know this is a reset moment. Walmart’s inside promotion said: we are executing a strategy that is working. Both signals were accurate. Both were intentional.

The companies that get this right — that match the nature of their leadership decision to the actual nature of their challenge — tend to recover faster, retain more talent, and spend less time explaining themselves to analysts. The ones that get it wrong spend years paying for the mismatch. In a retail environment moving at the speed of 2025, that is a gap no company can afford.

My recommendation for those looking to replace their retail CEO? Do exactly what Kroger did and hire your smartest retail enemy!