LONDON, March 26 (Reuters) - Co-op, 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
UK's Co-op warns of weak consumer confidence from geopolitical instability
Co-op Faces Financial Challenges Amid Global and Domestic Pressures
Impact of Geopolitical Instability on Consumer Confidence
LONDON, March 26 (Reuters) - Co-op, 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.
Cost-Cutting Measures and Strategic Response
The group, which is owned by its 6.2 million members and trades from more than 2,500 stores, said it planned to cut 200 million pounds ($267 million) of operating costs this year to help it return to profitability and better cope with volatility.
Energy Prices and Retail Sector Challenges
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.
Recent Retail Sales Performance
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 on Tuesday.
Leadership Changes at Co-op
Co-op also said 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.
Financial Performance Overview
Operating Losses and Revenue Decline
For 2025, Co-op reported an underlying operating loss of 35 million pounds ($47 million), compared to the 131 million pounds of profit it made the previous year, on revenues which fell 2.3% to 11 billion pounds.
Cyber Attack and Its Consequences
Revenue and Profitability Impact
The cyber attack last April led to payment problems and widespread shortages of goods in its shops resulting in an estimated 285 million pound direct impact on revenue and an estimated 107 million pound impact to profitability, Co-op said.
Additional Costs and Regulatory Pressures
The company's bottom line was also hurt by about 150 million pounds of additional costs as a result of higher employment costs brought in by government, new environmental regulations and higher wages for staff.
Diversified Business Operations
The group also provides funerals, insurance and legal services.
($1 = 0.7488 pounds)
(Reporting by Sarah Young; Editing by Kate Holton)
