Profits at the Co-op Group more than halved to £17m in the first six months of the year, hit by the group’s three-year plan to rebuild the business.

Co-op group chief executive Richard Pennycook said the fall in profit "was expected and planned" because of its restructuring programme.

Revenue increased by 2.2% to £4.7bn as customer transactions rose by 3.3% and like-for-like food sales climbed 3.1%.

The Co-op’s grocery business has continued to perform well, with food sales up by 3.1pc and like-for-like sales rising by 4.3pc. The mutual has focused its recovery on tapping into the convenience market to take advantage of shopping habits shifting away from big, weekly shops to smaller, more frequent trips to local stores.

Mr Pennycook, who requested a 60 per cent salary cut earlier this year on the basis that the company was no longer in "crisis" mode, said that the focus on convenience was paying off and the group was stealing market share from independent rivals. The food chain has grown its slice of the UK food market from 6.4pc to 6.6pc in the past year, according to figures released earlier this week by Kantar Worldpanel.

The group announced a £1bn three-year Rebuild programme in 2014.

"We are only half way through the Rebuild and much remains to be done, whether it is investing in our digital capability or campaigning on key issues," said Mr Pennycook.

He said the group is "firmly on track" and that the work is attracting more customers back to the Co-op.

The underlying profit before tax, which excludes temporary factors and one-off items, was £31m for the six months, down from £63m in the same period of 2015.

The Co-op has also shed supermarkets that do not fit its convenience strategy, most recently selling 298 shops to McColl’s Retail Group for £117m. It also sold 70 larger stores earlier this year that were a hangover of its disastrous Somerfield deal to turnaround firm Hilco.

Mr Pennycook said that the Co-op had "broken the back" of overhauling its grocery store estate. The retail boss added that the Co-op was in a better position than its major supermarket rivals, which are grappling with their plethora of vast stores.