Comment: Peter Marks leaves a mixed legacy at the Co-operative

The claim by Co-op chief Peter Marks that he will be leaving the business in “great shape” may raise a few eyebrows given the fall in profits reported last week. But, there is little doubt of the journey he has taken the group on since he took over in 2007.

As Marks unveiled his final set of full-year figures - which included a mixed performance at its food division with a 9.5% drop in underlying operating profits to £288m but flattish total sales of £7.44bn - the Yorkshireman said that he had transformed the retailer from an irrelevance to a challenger of the big four grocers.

Marks can certainly look back at his legacy with some pride, but he also leaves successor Euan Sutherland with some significant challenges.

The Somerfield deal in 2009 bought the mutual scale. But despite modernising strides, particularly in the supply chain and technology, Marks has been unable to leverage its increased size to compete with rivals such as Sainsbury’s and Tesco, while range and price remain an issue. But it’s been an inability to fully ride the wave of convenience, a market which is expected to grow 29% in the next four years to £44bn, which has been most disappointing.

The Co-op’s challenge is that it has never been able to ally its unique brand with the position of strength its store numbers give it at this end of the market, leading some to wonder whether the ethical stance can ever be enough of a USP to drive a strategic advantage.

For this reason, the arrival of Sutherland is a coup. Well known as an impressive operator - which will allow him to build on Marks’ modernising efforts, and perhaps even find an online model that will fit the Co-op’s food business - he is also a savvy marketer, a skillset that will be tested to the full in the intense heat of the grocery battlefield.