Co-op promotes Murrells to CEO as focus returns to ethics and social conscience

Co-op Group chief executive Richard Pennycock has stepped down after leading a turnaround of the mutual, with food chief Steve Murrells taking over at the top.

Pennycock, was poached from Morrisons to be chief financial officer in 2013 as the group was forced to cede control of Co-operative Bank, has agreed to act as a board advisor, primarily focusing on its relations with the banking arm.

Former easyJet marketing director and Tesco divisional chief, Murrells will join the group board on 1 March, as Pennycock leaves to take up the portfolio career he was aiming for in 2013.

Murrells, who was poached to run the Co-op Food business in 2012 following a stint as CEO of Danish meat company Tulip, has turned around food business, with the company claiming it has outperform the market for 18 consecutive quarters.

Chief operating officer Pippa Wicks has been promoted to deputy CEO with responsibility for delivery of the remaining aspects of the group's transformation.

Pennycock was promoted to group CEO in 2014, when Euan Sutherland jumped ship after just 10 months in charge amid a media storm around his £6.6m pay packet, claiming the mutual was "ungovernable".

On Tuesday, the board said beginning the third and final year of its rebuilding strategy, its attention was turning towards planning for the long-term 'renewal' phase, "which will seek to put the Co-op once again at the heart of communities in the UK, championing causes that are important to them and trading with an ethical heart and a social conscience".

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 4.5m members. We owe Richard a huge debt of gratitude and his place in Co-op history is secured."

He praised Murrells abilities as a "natural co-operator, a great leader" and said he was a unanimous choice to take the group CEO role.

For his part, Murrells said it was one of the most exciting times in the Co-op's 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. We have amazing colleagues and a growing and more engaged membership. Now is our time and we are ready to show the country that good businesses that do good things offer a better future for us all."