Co-op Reports Annual Loss and Warns of Geopolitical Risks

The Co-op, a prominent member-owned business in the United Kingdom, has cautioned that mounting geopolitical instability will likely dampen consumer confidence through 2026. The organization, which operates a vast network of grocery stores and services, cited the ongoing conflict involving Iran as a primary factor contributing to economic uncertainty and volatile energy prices.

For the 2025 fiscal year, the Co-op reported an underlying operating loss of 35 million pounds ($47 million), a significant reversal from the 131 million pounds in profit earned the previous year. Group revenue also declined by 2.3%, falling to 11 billion pounds. These losses were largely attributed to a major cyber attack in April 2025, which disrupted payment systems and caused widespread stock shortages, resulting in an estimated 285 million pound impact on revenue and a 107 million pound reduction in profitability.

Operational costs also rose by approximately 150 million pounds due to several factors, including higher government-mandated employment costs, new environmental regulations, and increased wages for the group's staff. The Co-op, which is owned by its 6.2 million members and operates more than 2,500 stores, also provides funeral, insurance, and legal services.

Trading conditions remain difficult and the current geopolitical landscape is adding further instability, CEO Shirine Khoury-Haq said in a statement on Thursday.

The difficult trading environment is reflected across the broader British retail sector. Data from the Confederation of British Industry showed that retail sales tumbled this month by the most since the start of the COVID-19 pandemic in April 2020. In response to these headwinds, the Co-op has announced plans to reduce its operating costs by 200 million pounds ($267 million) during the current year to restore profitability and better manage ongoing market volatility.