The Co-op Group has spoken out in defence of its leadership after some senior managers said there was a “toxic culture” at executive level.
A letter to board members at the member-owned retailer, used as the basis of a BBC report, makes claims of “fear and alienation” among senior staff.
Lawyers for the Group – one of 10,000 co-ops and mutuals in the UK, which is separate from a number of other co-operative retailers – have told the BBC they do not recognise the criticisms, and “do not believe that they represent the views of our broader leadership and colleagues”.
The letter alleges that some team members are afraid to raise concerns about the direction of the business in front of the leadership team, including CEO Shirine Khoury-Haq. This, it argues, has led to poor decisions at the Group, which it blames for poor morale, abrupt departures by team members and a hit to profits.
One senior manager told the BBC: “You learn to look at your shoes. Nobody can speak their mind in this business – anyone who does has their card marked.”
The letter, which claims to represent the views of a large number of senior managers, was sent by email to the chair and another member of the Co-op Group board more than two weeks ago and alleges that “leadership behaviours have significantly degraded the leadership culture of our Co-op”.
According to the report, several sources at senior manager level have told the BBC they support the contents of the letter in full and say they have felt too intimidated to speak up in front of the most senior executives.
The letter is also critical of the Group’s restocking policy in the wake of last year’s cyber attack. It accepts that the Group acted quickly to the crisis but argues that empty shelves were filled with whatever product was available, hitting profits and increasing food wastes.
One source told the BBC: “We were sending parsnips, which we could get, to fill the shelf space of steak, which we couldn’t.”
Senior managers talking to the BBC also criticised the merger of the Group’s retail, wholesale and third-party buying functions into one unit, Group Commercial and Logistics (GCL), claiming that experienced staff had warned that it would cause disruption to the business and confusion among suppliers.
Since the restructuring, “tens of colleagues” have left the business including many senior and experienced personnel, says the BBC. They include Jerome Saint-Marc, a managing director in the food business; Sinead Bell, chief commercial officer; and Adele Balmforth, propositions director, who all left in the last six months. Commercial director Rebecca Oliver-Mooney has also recently announced her departure.
The letter to members of the board says many feel that “decision after decision … has been poor, against advice, and carelessly communicated”.
A source told the BBC: “The Co-op is a great business that has had a wrecking ball put through it. The collaborative and supportive culture has been ruined. It’s toxic now. People are shell-shocked. Morale is at rock bottom – junior colleagues are looking to senior ones and asking why no one is doing anything about it.”
The Union of Shop, Distributive and Allied Workers (Usdaw), said concerns had also been raised by its members.
Jayne Allport, national officer at Usdaw, said: “Usdaw has also been critical of some of the decisions made by the business,” said national officer Jayne Allport. “Our reps working in stores, logistics and funeralcare continue to raise concerns from union members with senior management to seek solutions.
“We would encourage any Co-op colleagues afraid to speak out to join Usdaw and we will speak on your behalf.”
A spokesperson for the Group said: “Following the cyber-attack in 2025, which had a significant financial and operational impact on our business, we took informed decisions at pace to bring back the customers we had lost during the period of disruption and ensure the business was set up for future success. Given the challenging nature of these events, we had to make many difficult and decisive choices.
“Our culture, as a co-operative, ensured decision-making throughout has listened to views from leaders and colleagues across our food and wider business, whilst simultaneously acknowledging when a wide range of views are expressed, not everybody will always agree with the final decisions and actions taken.
“We do not recognise the critical comments referencing culture, leader behaviours and decision-making in our Co-op and do not believe that they represent the views of our broader leadership and colleagues.
“The actions we took in both the short and long-term interests of our Co-op as we responded to challenging trading conditions, has seen our businesses continue to move forward, and as a result all our businesses, including our Food business have now recovered market share back to pre cyber levels. Equally, [GCL] was established to significantly grow at scale our buying group and the opportunities from that are already driving positive results.
“Our colleague engagement remains high, and our culture and ethos mean we continue to engage with all our colleagues and leaders to ensure they act constructively and co-operatively for the long-term benefit of the business.”
Last September, the Group reported a half-year underlying pre-tax loss of £75m, with at least £206m in lost sales, citing challenges from the cyber attack.
The loss for the six months to 5 July compared to a £3m profit in the same period a year earlier. The Group, which also warned of increased staffing costs, estimates that the full-year results will see the hit to profits worsen to £120m as a result of the attack.
But it said it has maintained strong balance sheet with net debt at £43m, reduced from nearly £1bn in 2021, which has helped to withstand the pressures from the cyber attack and a poor economic backdrop.
