Steve Murrells replaces Richard Pennycook as Co-op boss

Richard Pennycook is stepping down as chief executive of the Co-op Group and is being replaced by Steve Murrells, currently head of its food business.

Mr Pennycook joined the company at the height of its crisis in 2013 and helped it rebuild its troubled bank.

He has said he wants to return to his previous career plans, which he put on hold when he joined the Co-op.

Last April, Mr Pennycook asked for a 60% cut to his total pay package saying his job had become easier.

Mr Murrells has been in charge of the Co-op's food business since 2012, when he joined the company,

Pippa Wicks, currently the group's chief operating officer, becomes deputy CEO while Jo Whitfield will take temporary charge of the food business.

Co-op chairman Allan Leighton said: "Richard Pennycook saved our Co-op. In three short years he has rescued and rebuilt our business and restored pride to our 70,000 colleagues and four-and-a-half million members.

"We owe Richard a huge debt of gratitude and his place in Co-op history is secured.

'Passing the baton'

Mr Pennycook said: "Leaving the Co-op was always going to be hard, but the time is right. The CEO who is to lead the renewal phase in 2018 has to be the CEO who builds the plan in 2017.

"In passing the baton to Steve, I leave safe in the knowledge that the Co-op will be taken forward by a leader who shares our vision of what can be achieved in the future."

Mr Murrells said: "I'm honoured to have this opportunity to lead our Co-op and to serve our millions of members. I take over at one of the most exciting times in our 150-year history.

"All the signs are that consumers are looking for a different type of business, one that looks after them and their communities and I truly believe that the Co-op is that business."

Pay cut

Co-op Bank, in which the group has a 20% stake, is still lossmaking despite a recapitalisation effort.

The bank posted a £132m loss for the first half of 2016. In 2013 a £1.5bn capital hole was found after a series of bad loans in commercial property and its purchase of rival lender Britannia.

The Co-operative Group's pre-tax profit more than halved to £17m in the first half of 2016 after restructuring costs and price cuts, but the company said its three-year turnaround plan was on track.

In April, Mr Pennycook's base salary fell from £1,250,000 to £750,000, after he said the business was now back "in calmer waters".

Mr Pennycook was finance director of the group, but took over as chief executive in 2014 when the former boss, Euan Sutherland, resigned after 10 months in the job.

Mr Sutherland's pay package, including salary and bonuses, was reported to be £3m.