Co-op CEO to step down amid financial losses and staff complaints

Shirine Khoury-Haq will step down as chief executive of Co-op on 29 March after four years, according to multiple reports. The departure comes as Co-op reported an underlying operating loss of £35 million, with the cyber attack leaving a £107 million dent in profits and dragging Co-op into the red with losses of £126 million for the 12 months to January 3, the company said. Khoury-Haq stated that following last year’s cyber attack, the organisation is now ready to deliver on an ambitious strategy of stabilisation and transformation, adding that this extends beyond the timeframe she had planned for her CEO tenure, and now is the right moment to hand over to leadership that can commit to seeing the strategy through.

The cyber attack had a direct impact of £86 million on Co-op's bottom line, according to the company. This financial blow contributed to the overall losses, though the full details of the attack's operational disruptions remain unclear. Co-op also reported additional £150 million in 'cost headwinds', according to multiple reports. Regulatory costs, including National Insurance increases and new packaging taxes, amounted to £47 million, further straining the company's finances. These combined pressures have created a challenging environment for the member-owned retailer.

Khoury-Haq's exit comes weeks after staff sent a letter to the board complaining of 'fear and alienation' in the organisation, according to multiple reports. Senior staff told the BBC they felt intimidated, and according to Daily Mail - Money, senior staff described a climate where nobody can speak their mind in this business – anyone who does has their card marked. Khoury-Haq was accused of presiding over a 'toxic culture', though the specific allegations and the full content of the staff letter have not been publicly disclosed. It is also unknown how many staff members were involved in the complaints or subsequent consultations.

In response to the culture allegations, Shirine Khoury-Haq said staff consulted about allegations of 'toxic issues' said they 'did not recognise it'. This statement was made during a press conference, highlighting a disconnect between management and some employees' experiences. The company has not announced a permanent replacement for Khoury-Haq, leaving leadership uncertainty amid the ongoing challenges. Co-op is owned by its 6.2 million members, according to multiple reports, a structure that may influence governance decisions as the board navigates the CEO transition and addresses internal concerns.