Co-operative chairman to step down

Sir Graham Melmoth confirmed yesterday that he is to step down as chief executive of the Co-operative Group later this year, ending a six-year reign which included the high profile defeat of the attempted takeover by Andrew Regan in 1997.

Sir Graham, who is expected to retire in September at the age of 64, said he was looking forward to taking life a little easier. "I feel quite good about it. It's a demanding job, which takes up weekends and evenings. I was in Rochdale at the weekend handing out the prizes for an award we sponsor and I was thinking 'is this a good thing to be doing on a Friday night?'"

Sir Graham, who was knighted in the New Year's Honours List, said he did not plan to seek a series of non-executive directorships. "I'll retain some of my Co-op interests but I'll probably give up everything else and have a clean break. We have a place in the Lake District and I'm looking forward to taking lots of long walks."

Asked how he now felt about the Regan takeover attempt he said: "It was a difficult start. It happened three months after I had taken over as chief executive. But it gave me a chance to get things through that I might not otherwise have done."

He cited the 2001 merger of the Co-operative Wholesale Society with its sister organisation, Co-operative Retail Services, as a significant achievement. Other highlights, he said, included the acquisition of a number of supermarkets from Somerfield and the recently announced merger of the Co-operative Bank and the Co-operative Insurance Society.

Sir Graham showed no sympathy for Allan Green and David Chambers, the two former Co-op executives who were both jailed last month for three and a half years for accepting £1m bribes to extend a contract with Mr Regan's food company, Hobson, in 1995. "We don't cry for them here. It was a betrayal."

Asked how the City's reputation was affected by the Regan bid he said: "The City didn't come out of it terribly well. So many of these deals are done on the basis of insider information. It's a question of getting caught."

Sir Graham's successor is expected to be announced next month. Candidates for the job include Martin Beaumont, chief executive of the United Co-operative, and Mervyn Pedelty, head of the Co-op bank.

The Co-operative Group yesterday reported a 48 per cent jump in operating profits to £164m for the year to January. The Co-op bank was again the best performer, contributing £107m of the profits. But the supermarket business also did well with profits up 76 per cent to £45m and like-for-like sales up 6.4 per cent at its convenience stores.

The group plans to introduce a full dividend that will be paid to customers depending on how much they spend. This will be available to customers of the Co-op's financial services operation as well as the supermarkets, travel and funeral businesses. Customers must become Co-op members to qualify.