Does Khoury-Haq’s resignation leave a listing Co-op in danger of sinking?

In a press conference this morning, hours after the Co-op had announced her decision to step down from the business, the retailer’s chief executive of the last four years, Shirine Khoury-Haq tried to walk a very fine line.

No, she said. Her decision to step away wasn’t a spur of the moment thing, but something she’d been discussing with the Co-op’s board and her executive team for a long time.

No, she also said. It had nothing to do with the hugely bruising last 12 months or so the Co-op has experienced. Whether the vicious cyber attack last year, or the subsequent allegations of a toxic workplace culture that broke in February.

Why then has she chosen now to go? And what shape has she left the business she’s been at for over seven years?

Don’t you know that you’re toxic?

Khoury-Haq was insistent that the BBC’s story from February about a “toxic culture” of fear and abuse at the Co-op was neither the reason for her departure, nor did it paint a picture of the business that she or her staff recognised.

“I have the privilege of meeting with a group of colleagues that represent all 53,000 of our workforce. They give us very straight feedback, and we ask them directly to go and talk to 53,000 people and come back to us and tell us what their views were in terms of culture,” she said.

“We heard very clearly that they did not recognise this term of toxic issues, they were very clear about that. However, what they did say is that in a couple of our areas where there were reorganisations taking place there was some discomfort there.

“They said to us that there were areas where we had not communicated as clearly as we could have. We’ve taken on that feedback and we will address it. We will continue to speak to our colleagues about anything that’s on their minds, whether it’s culture, whether it’s the state of our business, but we have heard directly from them that they do not recognise this.”

Instead, Khoury-Haq insisted that it was a “personal decision” and that she wanted to “go and do something else”. 

Why an interim?

That is as may be. But, with her final day as Co-op Group chief executive set for Sunday, March 29, wasn’t this all a little bit sudden?

Khoury-Haq said that in an organisation the size of the Co-op, successions are a “continual thing that we discuss with the board. So, while it might seem sudden, it has been a discussion over a period of time”.

She added it was now up to the board to make the decision of whether they wanted to hire a brand-new group chief executive in the short-term “or have an interim period with someone they know can lead”.

To that end, the Co-op announced that it had tapped non-executive board member Kate Allum as an interim chief executive.

While the Co-op said Allum has “served on a range of boards for almost 30 years” and brings a “rich understanding of a number of sectors including food, recycling, higher education and water”, hers isn’t exactly a well-known name in retail.

Particularly not when she shares the Co-op’s non-executive board with both former Lidl GB chief executive Ronny Gottschlich, and former Ocado Solutions chief executive Luke Jensen.

On why the board hadn’t approached either Gottschlich or Jensen, Khoury-Haq was evasive, saying only that that was a question for the Co-op’s non-executives.

However, she did note that “Ronny (Gottschlich) has been very clear about his work-life balance and where he wants to focus (his time)”.

Allum’s nod for interim chief executive also casts doubt on the executive team Khoury-Haq has built around her over the last four years. Given that Khoury-Haq began her own tenure as Co-op group boss in an interim capacity, why were none of them tapped up as her long-term replacement?

Analysts speculate that this might have to do with the fact that, apart from long-term food boss Matt Hood, most of the Co-op’s experienced senior executive team have recently left the business.

The most recent was former quick commerce managing director Chris Conway, who stepped away from the business in late February after over eight years.

Conway followed the likes of chief commercial officer Sinead Bell, propositions director Adele Balmforth and managing director for growth and business to business Jerome Saint-Marc, who have all recently left the business.

“For a company that claims it doesn’t have a toxic workplace environment, that’s an awful lot of senior people leaving the business in a short space of time,” said one analyst.

They also noted the scale of the job facing Allum, and whoever might come after her, in a more permanent capacity.

“After four years, and one turnaround, Khoury-Haq is leaving the Co-op behind at a time when it needs to undertake another, massive turnaround,” they said. “Now a lot of that might not be her fault, certainly not the cyber-attack, anyway. But the scale of the job facing the new interim CEO and what’s left of the senior executive team is huge”.

Turn, turn again

Aside from the boardroom succession crisis, the Co-op’s numbers for the most recent financial year highlight the scale of its trading issues. For the financial year to January 3, 2026, the c-store specialist plunged to a £126m loss, while revenues dipped 2.3% to just over £11bn.

While there were bright spots for the business - not least that it has now regained or surpassed market share levels across food, wholesale and life services post attack - the analyst says the trading update highlights the Co-op’s struggles, even before the most recent downturn.

“Those numbers show that the Co-op was already in a hole before war broke out in the Middle East,” the analyst added. “Yes, a lot of that is down to the cyber attack, but even when you strip that out, revenue growth was broadly flat.

“Since January 3, everything will have got more expensive on the supply chain end. And you’ve now got a cash conscious supplier, who was already stepping back from convenience retailers like the Co-op, who is only going to be pushed further towards the discounters and the likes of Tesco as they begin to feel more of a hit in their pocket as time goes on”.

From the outside looking in at least, Khoury-Haq’s resignation couldn’t have come at a worse time for the struggling retailer.

For the time being at least, Kate Allum will be tasked with navigating the retailer through a potentially even more turbulent year than the last, all while trying to rebuild the Co-op’s culture, denuded leadership team, and win back price conscious consumers who will prioritise value over convenience.