Steve Murrells, who joined the group to lead its food business in 2012, is to join the board on March 1. Pennycook will step down on the same day.
The move comes as the Co-op starts the next phase of its plans to make its stores the “heart of the community UK, championing causes that are important to them and trading with an ethical heart and a social conscience”.
Pennycook took the role of ceo in 2014 following the departure of former boss Euan Sutherland, who had been in the role for just 10 months.
Adviser to the group
He will act as an advisor to the group after stepping down as ceo, focusing on its relations with the Co-operative Bank.
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.”
Pippa Wicks, currently chief operating officer of the group, will become deputy ceo. Finance director Jo Whitfield will fill in as ceo for the food business on an interim basis.
Rebuilding the business
Co-op chair Allan Leighton thanked the Pennycook for rebuilding the business and welcomed Murrells to his new role.
“We are fortunate to have Steve as our new group ceo,” added Leighton. “He is a natural co-operator, a great leader and has already done so much to return our Co-op to its former glory.
“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.”
Meanwhile, look out for this month’s gallery of people on the move to new roles in the food and drink industry.