The Co-op has defended itself against allegations of a “toxic culture” among leadership after reports that some senior managers had raised concerns of sinking morale, abrupt departures and an increase in food waste.
A letter to Co-op board members, seen by the BBC, complains of “fear and alienation” among even senior staff afraid to raise concerns in front of leadership about the trajectory of the business, including the chief executive Shirine Kouhry-Haq.
The fresh allegations follow a bruising year for the 180-year-old mutual after a major cyberattack in April led to empty shelves and the theft of customer data by hackers. The group has said that the incident cost it £206 million in lost sales and it swung to a £75 million pre-tax loss in the half-year to July. The latest UK customer satisfaction index showed Co-op customers were the most dissatisfied among Britain’s biggest supermarkets last year.
The letter was emailed to the chair and another member of the Co-op board more than a fortnight ago and alleges that “leadership behaviours have significantly degraded the leadership culture” at the company. It contents have reportedly been corroborated by other senior managers. “You learn to look at your shoes. Nobody can speak their mind in this business — anyone who does has their card marked,” one said.
In a statement the Co-op said it did “not recognise the critical comments referencing culture, leader behaviours and decision-making” and did not believe they represented the “views of our broader leadership and colleagues”.
“Our culture, as a co-operative, ensured decision-making throughout has listened to views from leaders and colleagues across our food and wider business, while simultaneously acknowledging when a wide range of views are expressed, not everybody will always agree with the final decisions and actions taken.”
The Co-op’s chief executive, Shirine Khoury-Haq
Among the letter’s contents was an insistence that actions taken after the cyberattack to restock empty shelves with whatever products were available, had impacted sales and profits further while accelerating food waste.
Other senior managers told the BBC that they believe the continuing decline in performance could no longer be explained by the attack and criticised decisions including the creation of a new group commercial and logistics division (GCL), which involved a restructuring of its commercial team.
The Co-op said it had made “informed decisions at pace to bring back the customers we had lost during the period of disruption. Given the challenging nature of these events, we had to make many difficult and decisive choices.”
It added that the actions taken had seen all its business, including food, recover 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.”
Jayne Allport, national officer for the Usdaw union, which represents Co-op members, said it had “also been critical of some of the decisions made by the business”, adding: “Our reps working in stores, logistics and funeralcare continue to raise concerns from union members with senior management to seek solutions.”
