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Co-operative Group embarks on top-level shake-up

The Co-operative Group has embarked on a top-level shake-up that will see Richard Pennycook step down as group chief executive.

Mr Pennycook will make way for Steve Murrells, the chief executive of the group's food business, who will join the board on March 1.

In a statement, Co-op chairman Allan Leighton said the group owed Mr Pennycook a "huge debt of gratitude" for guiding the organisation on to firmer financial ground.

"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 4.5 million members."

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

The move comes amid a raft of senior management changes, with group chief operating officer Pippa Wicks becoming deputy chief executive, and finance director Jo Whitfield stepping up to interim chief executive of Co-op Food.

Mr Pennycook, who first joined as interim chief executive in 2013, will continue to work with the mutual as an adviser, including overseeing work to separate the group's pension scheme from the Co-op Bank.

The Co-op Group said that Mr Pennycook had guided the firm through the "rescue and rebuild" phases after the mutual came close to collapse.

Mr Murrells will now lead the organisation through a so-called "renewal" phase focused on growing the organisation.

"Leaving the Co-op was always going to be hard, but the time is right," Mr Pennycook added.

"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."

The Co-op recorded a robust end-of-year performance in January after nearly going bust in 2013 after the discovery of a £1.5 billion financial hole in its bank business.

The supermarkets-to-funeral services mutual said its retail chain saw l ike-for-like food sales rise 3.4% in the final quarter of the year, boosted by a 4% increase at its core convenience stores.

It comes after Mr Pennycook asked the board to slash his base salary last year from £1.25 million to £750,000 because the group had entered ''calmer waters'' following a hard-fought turnaround.

The outgoing chief executive - who will be paid a £20,000-a-month consultancy fee by the Co-op - has ruled out taking up another chief executive role, opting instead to focus on a number of non-executive positions.

His departure came as Mr Leighton praised the performance of the mutual's general insurance business, but said it was doubtful the group would ever own a bank again.

The mutual, which holds a 20% stake in the Co-op Bank, is currently unpicking the group pension scheme from the Co-op Bank's pension scheme in a process expected to take "a number of months".

The Co-op has 3,750 outlets across the UK, with more than 70,000 staff.

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