Shirine Khoury-Haq, the Co-op’s chief executive, is set to leave the company at the end of March after a turbulent year marked by a devastating cyber-attack and allegations of a toxic culture within the organisation’s leadership.
A Tumultuous Year for the Co-op
The Co-op Group, a major player in British retail and services, has faced significant challenges over the past year. Alongside operating more than 2,000 convenience stores, funeral parlours, and insurance and legal advisory businesses, the group struggled after a cyber-attack last April that compromised its IT systems and customer data.
That attack forced the Co-op to shut down parts of its network, costing the group around £285 million in lost sales. The fallout continued through the year, resulting in an underlying loss of £125 million, a sharp reversal from the previous year’s £45 million profit. Sales dropped by 2.3% to £11 billion in the year ending January 3, 2026, reflecting the impact of supply chain disruptions and an increasingly competitive convenience store market.
Khoury-Haq, who has been with the Co-op for seven years and led it for four, acknowledged that the organisation had "lost trading momentum" while concentrating on recovery. She cited a contracting convenience market and layered cost increases—including rises in national insurance, pay, and packaging taxes totalling approximately £150 million—as additional pressures.
Tensions at the Top: Culture Under Scrutiny
Khoury-Haq’s resignation comes shortly after the BBC reported serious concerns about the Co-op’s workplace culture.
A letter, purportedly from many senior managers, was sent to the Co-op board outlining claims of "fear and alienation" within the leadership ranks. Some senior staff felt unable to voice concerns openly, especially in the presence of top executives.
One senior manager described the environment as one where "nobody can speak their mind" without fear of repercussions. Sources suggested this culture of intimidation had contributed to poor decision-making, low morale, abrupt departures, and a rise in food waste.
The Co-op initially rejected these characterisations, with lawyers stating that such views didn't represent the broader leadership or workforce. Khoury-Haq herself said she had received feedback from colleagues that contradicted the reports of a toxic culture but admitted there had been some discomfort linked to internal reorganisations and communication gaps.
Leadership Transition and Future Prospects
Khoury-Haq will leave the Co-op on 29 March.
Kate Allum, a Co-op board member and former chief executive of dairy group First Milk, will take over as interim chief executive while a search for a permanent successor is underway.
In a statement, Khoury-Haq described it as an honour to lead the Co-op and expressed her wish for the group's future success. She indicated that her departure was a personal decision unrelated to the reported cultural issues.
She also suggested the organisation had stabilised following the cyber-attack and was ready to pursue a new phase of transformation. "This extends beyond the timeframe I had planned for my CEO tenure," she said, "and now is the right moment to hand over to leadership that can commit to seeing the strategy through."
What Lies Ahead for the Co-op?
The Co-op has shown how even long-standing mutuals can struggle with market changes, cyber threats, and internal problems. The cyber-attack not only disrupted operations but also shook consumer confidence, with all 6.5 million members having their data stolen.
At the same time, the toxic culture claims at the top have sparked concerns about how the group is managed and how engaged its employees feel. The way the Co-op deals with these problems will be key to its recovery.
While looking for new leaders, the Co-op needs to focus on making profits again and regaining trust from staff and customers. The convenience market remains competitive and sensitive to household budgets, meaning the group can't afford further missteps.
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Bringing Kate Allum in as interim CEO marks a time for the Co-op to rethink and regroup. We'll have to wait to see if she can guide the group toward steady growth and a better work environment.
This article was created with AI assistance.
