The Co-op Group, which runs a range of businesses in Britain including grocery stores, warned mounting instability from the Iran war would hit consumer confidence in 2026, after a cyber attack and higher costs pushed it to a loss last year.
The group, which is owned by its 6.2 million members and trades from more than 2,500 stores, said it planned to cut £200m of operating costs this year to help it return to profitability and better cope with volatility.
The impact of the Iran war on energy prices, with knock-on effects on consumer spending, is adding to the challenges faced by the UK retail sector.
British retail sales tumbled this month by the most since April 2020 when most non-food shops were closed at the start of the Covid-19 pandemic, a survey by the Confederation of British Industry showed earlier ths week.
Co-op also said today that its CEO Shirine Khoury-Haq would step down at the end of March after four years in the role and it named Kate Allum, a board member, as interim group CEO.
For 2025, Co-op reported an underlying operating loss of £35m, compared to the £131m of profit it made the previous year, on revenues which fell 2.3% to £11 billion.
The cyber attack last April led to payment problems and widespread shortages of goods in its shops resulting in an estimated £285m direct impact on revenue and an estimated £107m impact to profitability, Co-op said.
The company's bottom line was also hurt by about £150m of additional costs as a result of higher employment costs brought in by the UK government, new environmental regulations and higher wages for staff.
The group also provides funerals, insurance and legal services.
