The Co-operative Group has persuaded Guy McCracken, its influential CEO of food retail, to delay his retirement to integrate Somerfield into the business.

McCracken officially stepped down as head of food on Sunday but will take up the new post, based at Somerfield’s headquarters in Bristol, following his return from a short holiday.

It is understood that in his new role he will be working closely with the Office of Fair Trading to iron out any potential local competition issues that may be caused by combining the two businesses.

The £1.57bn deal, which was revealed two weeks ago after months of talks,was filed with the OFT this week and is subject to approval from the watchdog. The OFT confirmed that it was considering whether the buyout would lead to a “substantial lessening of competition within any market or markets in the UK for goods or services that warrants reference to the Competition Commission for investigation and report”. 

It has given interested parties until 11 August to submit any competition or public interest issues they may have regarding the deal.

Because the Co-operative Group already boasts a portfolio of 2,291 stores and Somerfield has 880 stores, group CEO Peter Marks has admitted there could be competition issues.

“Given a deal of this nature, there are likely to be some local competition issues,” he said. “We are confident we will be able to work through these with the Office of Fair Trading.” 

The society is also well versed in working with the OFT. Following the its merger with United Co-operatives in July last year, it voluntarily agreed to sell eight stores to avoid a referral to the Competition Commission.

Although it is unclear how many stores the Co-operative Group could be forced to offload, any sell-off would be sure to spark a flurry of activity in retail. Supermarkets including Asda, Waitrose and Iceland, as well as discounters Poundland, Home Bargains and B&M Bargains, have already expressed an interest in picking up stores.

Retaining McCracken, a former joint MD of Marks & Spencer who was appointed head of food for the Co-op Group in May 2005, is a coup for the Co-op. 

During his time in the role he has proved his worth by masterminding a revival of the society’s food business. A year after McCracken’s appointment, the Co-operative Group’s food division reported its first quarter of like-for-like growth in two years, and since then has recorded eight consecutive quarters of growth. 

He also revamped the society’s Truly Irresistible and Healthy Living ranges, introduced the ‘Good with Food’ strapline and led a store refurb programme that resulted in double-digit sales growth in rebranded stores. Some 700 stores are expected to have been refurbished by the end of the year, at a rate of 15 a week.

Tim Hurrell, who has been managing director for food retail designate since May last year, replaces McCracken. 

He has an extensive background in food retailing stretching back more than 30 years, most recently as general manager of food at United Co-operatives.