The Co-op’s group chief executive Richard Pennycook is stepping down from the mutual, to be succeeded by food boss Steve Murrells.

Pennycook joined the Co-op as finance director in 2013 and helped steer the business through a scandal at its bank.

He was promoted to the top job when Euan Sutherland quit the mutual, his leadership was recognised as last year’s Retail Week Awards.

Pennycook’s departure comes less than a year after he took a voluntary pay cut, as the Co-op moved from crisis to recovery mode.

The Co-op said in a statement that Pennycook plans to build a portfolio career, which he put on hold when he joined in what was initially a temporary role.

The Co-op said: “This announcement is part of transition arrangements for the group as it prepares to move from the successful ‘rebuild’ phase of its turnaround to the ‘renewal’ phase.

“The group has made great progress on rebuilding the Co-op, with businesses performing strongly over the past two years and Rebuild plans starting to deliver value for our members.

“As the group enters the third and final year of its Rebuild, the attention of the leadership turns to planning for ‘renewal’ - a long term 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.”

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.”

Murrells joined the Co-op to run its food business in 2012 and has led the turnaround of the convenience specialist.

He will join the group board on March 1, when Pennycook will officially step down.

Pennycook however will stay on as an advisor to the group, primarily to focus on its relationship with the Co-operative Bank.

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.

“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.”

Co-op Food finance director Jo Whitfield will become chief executive of the food business on an interim basis, with group chief operating officer Pippa Wicks becoming the group’s deputy chief executive.

The Co-op chairman Allan Leighton hailed Pennycook’s contribution to the business.

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

On the appointment of Murrells as the group’s new chief executive, Leighton added: “He is a natural co-operator, a great leader and has already done so much to return our Co-op to its former glory.

“Steve has transformed our food business and put it back at the heart of communities across the country.

“His leadership has seen our Co-op consistently outperform the market in food and he is the right and unanimous choice to now take the whole group forward for the next phase of our transformation.”