Co-op Announces £126m Loss and CEO Departure Following Major Cyber Attack
The Co-op, a major retail group headquartered in Manchester, has reported a significant pre-tax loss of £126 million for the financial year ending in January 2026. This stark financial downturn marks a dramatic reversal from the previous year's profit of £45 million, with the company attributing £107 million of this loss directly to a devastating cyber attack that occurred in April 2025.
Leadership Changes Amid Financial Turmoil
In response to these challenges, Group CEO Shirine Khoury-Haq has announced her departure after nearly seven years at the helm. Khoury-Haq stated that her decision to step down is intended to allow the organisation to move forward beyond the cyber incident, as it embarks on an ambitious strategy of stabilisation and transformation that extends beyond her planned tenure.
Board member Kate Allum has been appointed as interim CEO and will oversee a comprehensive cost-cutting programme. The retailer has committed to reducing annual operating costs by £200 million by the end of 2026 as part of its recovery efforts.
Impact of the Cyber Attack on Operations
The cyber attack in April 2025 resulted in data theft affecting all 6.5 million Co-op members and created substantial operational disruptions. Beyond the direct £107 million impact on profitability, the incident inflicted an additional £86 million hit on margins and £21 million in non-recurring costs.
Revenue across the group dipped by 2.3 percent year-on-year, with the company acknowledging it lost "momentum" due to the cyber security breach. The retail division specifically saw revenue decline by two percent to £7 billion, though the company claimed this would have represented one percent real-term growth if the attack's impact were excluded.
Mixed Performance Across Business Divisions
While the retail division struggled, Co-op's Life Services division – which includes its funeral business – demonstrated more resilience with revenue growth of four percent to £418 million. The company noted this growth would have reached seven percent if not for the cyber attack's effects.
Despite the financial challenges, Co-op invested £318 million in capital expenditure during the past year, focusing on store improvements and technology upgrades as part of its recovery strategy.
Commitment to Recovery and Community Values
Debbie White, Chair of Co-op, acknowledged the difficulties of 2025 while expressing confidence in the organisation's future direction. "2025 was a challenging year, but those challenges have helped us reshape Co-op for the future," White stated. "Despite a cyber attack and tough market conditions, our colleagues have shown incredible resilience, keeping communities served and essential services running."
The company reaffirmed its commitment to British farming, continuing to source 100 percent of its own-brand meat from British farmers. In 2025 alone, Co-op spent £700 million with UK agricultural suppliers, maintaining its support for domestic producers despite financial pressures.
Broader Industry and Government Response
The Co-op cyber attack, along with other retail cyber incidents throughout 2025, prompted significant government action. Authorities committed a £210 million package to enhance cyber security measures and prevent future attacks across the retail sector.
As the Co-op navigates this transitional period, the appointment of interim CEO Kate Allum signals a renewed focus on financial discipline and operational efficiency while maintaining the cooperative's core values and community commitments.
