The Co-operative Group chief executive Peter Marks insists the business is in 'great shape' despite profit plunge

Marks said that he had moved the retailer from being “irrelevant” when he took up the reins in 2007 to challenging the country’s four biggest grocers.

Asked whether he was handing successor Euan Sutherland, who joins as The Co-operative Group chief executive from Kingfisher in May, a poisoned chalice following the profit dip, Marks said: “Far from giving Euan a poisoned chalice I’m giving him a business that’s in great shape. It’s a brand that’s renewed itself.

“It was irrelevant before and now it’s not. Is it job done? Of course it’s not but we are in a good position.”

Marks spearheaded the acquisition of Somerfield in 2010 which made The Co-operative Food the UK’s fifth largest grocer.

The Co-operative Group today reported an 89% plunge in underlying profits to £54m due to a number of factors in its banking division.

Its food division posted a 9.5% drop in underlying operating profits to £288m from £318m last year. Total sales rose to £7.44bn in the year to January 5, up from £7.34bn.

Like-for-like sales were down overall by 0.7% but improved to break into positive growth of 0.3% in the fourth quarter. Like-for-likes across its core convenience estate rose 1.9% in the year under the stewardship of food chief executive Steve Murrells.

Marks said: “We are back to growth in a very tough market.”

Marks said The Co-op is in a strong position with its core estate in the rapidly growing convenience market. He said: “We are the clear market leader in the convenience market.

“We have the biggest reach of any of our competitors with 2,000 stores. We reach into the corners of the UK.”

The Co-op said in 60 stores it is trialling a new format featuring improved navigation, and fresh food offers are performing well. Marks said the results of the trials had been “very encouraging” and that the retailer will continue to refine the model.

It claims improvements in availability have brought shoppers back to The Co-op. “We are the fifth largest grocer and we want to grow. We have taken back business as one of the big four [Morrisons] is losing market share. We have to take it from somewhere and we are pleased with that,” Marks said.