New Co-operative Group chief executive Euan Sutherland has insisted its food division will not be affected by the ‘bail in’ of its banking arm and has merged responsibilities at the top of its retail division.
Sutherland said that although he has spent his first six weeks at the head of the £13bn business focusing entirely on its struggling banking division, his strategy for food is clear.
Sutherland, who replaced Peter Marks in the top job last month, told Retail Week: “It does not have any impact on our food division, we are very committed to our food strategy.”
The Co-operative set out a plan to stabilise its bank and plug a £1.5bn gap in its finances on Monday.
Standard & Poor’s and Moody’s have both downgraded The Co-op since Monday’s ‘bail in’.
Sutherland, who joined from Kingfisher where he was chief opertating officer, has brought the mutual’s food, pharmacy and online businesses into one retail division, Retail Week can reveal.
Under the restructure, The Co-operative Pharmacy managing director John Nuttall will report to The Co-operative Food chief executive Steve Murrells. Sutherland has already moved to bolster the company’s top team, bringing in former Morrisons finance boss Richard Pennycook as interim finance director.
Sutherland insisted there are no plans to make redundancies after merging the responsibilities.
He said: “We now have a retail division with food, pharmacy and online under Steve Murrells. There are synergies in terms of merchandising and cross fertilisation of ideas. I have put them all into one powerhouse and there is real opportunity.”
He added the move will allow the business to pool ideas and standardise their approach to ranging, merchandising, products and staffing.
Sutherland said he and Murrells have a “very clear strategy” to improve the food business which experienced a 1.3% fall in sales in the 12 weeks to June 9, according to Kantar Worldpanel data released yesterday.
Sutherland, who was a non-executive director at The Co-operative Food for three years, said: “We are very focused on getting back to our roots. We want to be the best convenience food retailer in the UK. We are focusing on our people strategy to improve engagement and service in store.”
The Co-op will also focus on improving its own label offer and Sutherland said there are also “opportunities” for acquisitions to increase its store base.
The retailer is also conducting a review of its online operations, led by chief information officer Andy Haywood, which Sutherland will contribute to. The grocer does not sell food online at present.
Pennycook added that the ‘bail in’ would have “very little” impact on the food arm and added that he was tempted back to a top retail position shortly after leaving Morrisons by the challenge of turning round the ailing banking business.