Co-op Group warned that the increasing instability resulting from the conflict in Iran would 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 operating through over 2,500 stores, announced its intention to reduce operating costs by £200 million ($267 million) this year to return to profitability and better cope with volatility.
The impact of the war in Iran on energy prices, and its cascading effects on household expenses, adds to the challenges facing the retail sector in the UK.
Retail sales in Britain have plummeted this month at an unprecedented rate since April 2020, when most non-essential stores were closed at the start of the COVID-19 pandemic, according to a Confederation of British Industry survey published 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 appointed interim CEO.
For the 2025 fiscal year, Co-op reported an underlying operating loss of £35 million ($47 million), compared to a profit of £131 million the previous year, with revenue declining 2.3% to £11 billion.
Last April’s cyberattack led to payment problems and shortages of goods in its stores, directly impacting revenue by £285 million and profitability by £107 million, the group specified.
The company’s net result was also affected by approximately £150 million in additional costs stemming 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)
