Published by Global Banking & Finance Review®
Posted on March 26, 2026
2 min readLast updated: March 26, 2026
Add as preferred source on GoogleThe UK’s Co‑op warns that geopolitical instability—particularly the Iran war—is weighing on consumer confidence and retail spending, following a 2025 loss driven by cyber‑attack disruptions and rising costs. It plans £200 million in cost cuts to return to profitability amid falling retail sales.
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.
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.
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.
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.
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.
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.
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.
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.
The group also provides funerals, insurance and legal services.
($1 = 0.7488 pounds)
(Reporting by Sarah Young; Editing by Kate Holton)
Co-op's 2025 loss was due to cyber attacks, higher operating costs, and falling revenues.
The Iran war is increasing energy prices and causing uncertainty, impacting consumer spending in the UK.
Co-op plans to cut £200 million in operating costs to cope with volatility and return to profitability.
The cyber attack caused payment problems, product shortages, and a direct impact on both revenue and profitability.
In addition to retail, Co-op provides funerals, insurance, and legal services.
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