The Co-op group, which operates various businesses in the UK including a retail chain, has warned that the increasing instability resulting from the conflict in Iran would weigh on consumer confidence in 2026, following a cyberattack and a rise in costs that 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 pounds ($267 million) this year in order to return to profitability and better cope with volatility.
The impact of the war in Iran on energy prices, and its cascade effects on household expenses, adds to the challenges facing the distribution sector in the UK.
UK retail sales have dropped this month at an unprecedented rate since April 2020, when most non-essential stores were closed at the beginning of the COVID-19 pandemic, according to a survey by the Confederation of British Industry published on Tuesday.
Co-op also announced that its CEO, Shirine Khoury-Haq, would 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 pounds ($47 million), compared to a profit of 131 million pounds the previous year, with a revenue decrease of 2.3% to 11.000 million pounds.
The cyberattack last April led to payment issues and shortages of goods in its stores, resulting in a direct impact of 285 million pounds on revenue and 107 million pounds on profitability, the group specified.
The company’s net result was also affected by around 150 million pounds in additional costs due to increased social charges imposed by the government, new environmental regulations, and wage hikes.
The group also offers funeral, insurance, and legal services.
(1 $ = 0.7488 pounds)
