The Co-op group, which operates various businesses in the UK including a grocery chain, has warned that the increasing instability resulting from the conflict in Iran will weigh on consumer confidence in 2026, after a cyberattack and rising costs plunged it into the red last year.
The group, owned by its 6.2 million members and present through over 2,500 outlets, announced its intention to reduce operating costs by £200 million ($267 million) this year to return to profitability and better cope with the volatility.
The impact of the war in Iran on energy prices, and its ripple effects on household spending, adds to the challenges facing the distribution sector in the UK.
Retail sales in Britain have dropped this month at an unprecedented pace since April 2020, when most non-essential businesses were closed at the beginning of the COVID-19 pandemic, according to a Confederation of British Industry survey released on Tuesday.
Co-op also announced that its CEO, Shirine Khoury-Haq, will step down at the end of March after four years in the role. Kate Allum, a board member, has been named interim CEO.
For the fiscal year 2025, Co-op reported an underlying operating loss of £35 million ($47 million), compared to a profit of £131 million the previous year, with a revenue decline of 2.3% to £11.000 billion.
Last April’s cyberattack resulted in payment problems and shortages of goods in its stores, causing a direct impact estimated at £285 million on revenue and £107 million on profitability, the group specified.
The company’s net result was also penalized by around £150 million in additional costs resulting from increased social charges imposed by the government, new environmental regulations, and wage increases.
The group also offers funeral, insurance, and legal services.
(1 $ = 0.7488 pounds)
