The Co-op Group, which operates various business activities in the UK including a retail chain, has warned that the growing instability stemming 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 present through over 2,500 outlets, announced its intention to reduce its 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 repercussions on household expenses, adds to the challenges facing the retail sector in the UK.
British retail sales have dropped 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 survey by the Confederation of British Industry released 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 position. Kate Allum, a board member, has been appointed 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 in the previous year, with a revenue decline of 2.3% to £11.000 million.
Last April’s cyberattack led to payment issues and shortages of goods in its stores, resulting in a direct impact estimated at £285 million on revenue and £107 million on profitability, according to the group.
The company’s net result was also affected by around £150 million in additional costs resulting from increased social charges imposed by the government, new environmental regulations, and salary increases.
The group also offers funeral, insurance, and legal services.
(1 $ = 0.7488 pound)
