UK Co-op warns of weak consumer confidence amid geopolitical instability

Thursday 26 March 2026 - 09:30

Co-op, which operates grocery stores and other businesses across United Kingdom, has warned that ongoing geopolitical instability stemming from the Iran conflict is expected to weaken consumer confidence in 2026.

The cooperative, owned by its 6.2 million members and operating more than 2,500 outlets, reported an underlying operating loss of £35 million ($47 million) in 2025, compared to a profit of £131 million the previous year, as revenues declined 2.3% to £11 billion. A cyber attack in April 2025 caused payment disruptions and shortages, leading to an estimated £285 million impact on revenue and £107 million on profitability.

Additional pressures included rising energy costs, higher wages, and compliance with new government and environmental regulations, contributing roughly £150 million to expenses.

To address these challenges, Co-op plans to cut £200 million ($267 million) in operating costs this year to restore profitability and better manage market volatility. In leadership changes, CEO Shirine Khoury-Haq will step down at the end of March, with board member Kate Allum appointed as interim CEO.

Retail analysts highlight that rising energy prices and global uncertainty are placing significant pressure on the UK retail sector, with March sales showing the steepest decline since April 2020, according to the Confederation of British Industry. Co-op’s warnings reflect broader economic challenges affecting consumer spending and business performance.