Co-op is fighting back against intense retail pressure – including cyber attacks, rising costs, and the relentless march of online giants like Amazon – by turning its massive supply network into a sharper competitive weapon.
On Thursday (26 March), the member-owned retailer announced the launch of a new Commercial and Logistics division. The unit will centralise buying, sourcing, and logistics across its sprawling ecosystem of nearly 8,000 stores, which includes its own estate, franchise partners, and regional co-operatives.
Outgoing Chief Executive Shirine Khoury-Haq framed the move as a direct response to scale advantages enjoyed by larger players. “Including our own estate and partners, we supply close to 8,000 stores; our new Commercial and Logistics business is turning this strength as a supplier into a path to growth,” she said.
The announcement comes as Co-op navigates a tough 2025 marked by a major cyber attack that cost an estimated £86 million in margin and £285 million in revenue impact.
Overall group revenue fell 2.3%, with an underlying operating loss of £35 million after absorbing £150 million in broader cost headwinds, including higher National Insurance and regulatory charges.
Despite the setbacks, the group is leaning into its unique structure. Unlike pure-play supermarkets, more than half the stores it supplies are external partners.
The new division aims to leverage that collective buying power to drive down costs, improve pricing for shoppers, and create efficiencies that smaller or online-only competitors might struggle to match.
Co-op is positioning the network as an offensive tool in a market increasingly dominated by Amazon’s seamless online-to-offline model and aggressive price competition from discounters like Aldi.
Member-first strategy amid consumer caution
Co-op reported several bright spots amid the challenges:
- Active membership grew 17% to 7.2 million, with 1.7 million new joiners in the year. The group has now set an ambitious target of 10 million active members by 2030.
- Quick commerce (rapid delivery) expanded by 15%.
- Online convenience services rolled out to 279 additional stores, now reaching 90% of the UK population.
- Franchise stores grew to 65 locations, including new sites at universities and NHS facilities.
- Life Services (insurance, funerals, legal) delivered revenue growth of 4.2% and £41 million in underlying operating profit.
The retailer said it is now doubling down on member benefits to differentiate itself. It introduced price matching on over 100 Aldi items for members, launched targeted promotions, and began stocking Holland & Barrett health products in response to shifting consumer priorities.
“2025 was a challenging year, but those challenges have helped us reshape Co-op for the future. Despite a cyber attack and tough market conditions, our colleagues have shown incredible resilience, keeping communities served and essential services running,” said Debbie White, Chair of Co-op Group.
“To get back on track, we have adjusted our commercial strategy and strengthened our partner offer while substantially growing active membership. Now, we’re looking ahead with a strong focus on customers, while continuing to prioritise the people who own our business, targeting ten million active members by 2030.”
Cost-cutting and recovery mode
Co-op plans to remove £200 million in annual operating costs in 2026 and expects net debt to improve as working capital normalises. It invested £318 million in stores and technology last year and is trialling lower-energy “sustainability store” formats that use 40% less power.
In food retail, the group opened or refurbished 50 stores in the second half of 2025, launched 447 new product lines, and is pushing further into quick commerce while improving price perception.
Wholesale has been reset under the Co-op Wholesale banner (formerly Nisa Retail) with a new multi-fascia proposition and strengthened partner ties, including with Roadchef and Costcutter.
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