Co-op chief executive and food boss count the costs of retail crime and give their outlook for Christmas

C-store specialist the Co-op’s executive team were well within their rights to feel happy yesterday. After storming back into the black in the first half of the financial year, with profits before tax of £58m and group revenues jumping to £5.6bn for the period – up £100m year on year – group chief executive Shirine Khoury-Haq and managing director of food Matt Hood spoke to journalists.

They answered questions about the ongoing scourge of retail crime and how the retailer is combating it, and the outlook for the all-important run-up to the golden quarter and Christmas.

Crime stays

Khoury-Haq said the market “is in a less volatile period versus the inflation we’ve previously seen”, adding that, despite a month-on-month drop in the most recent GfK consumer confidence figures, “we’re actually seeing that [confidence] is coming back to the levels seen at the beginning of the year”.

Despite the easing cost-of-living crisis and last year’s rampant inflation returning to normal levels of late, the Co-op is still being hit hard by retail crime.

The retailer pulled the material cost of shoplifting and other retail crime out in its accounts for the first half of the year, which showed that theft and fraud costs rose by nearly a fifth to more than £39m.

Speaking about the “epidemic” of crime the Co-op continues to experience, food boss Hood said: “It isn’t going away.” He added that violence and abuse of the Co-op staff also continue to surge.

“The reality is that every day four of our colleagues are attacked, up 34% on 2022, and, scarily, a further 115 of my colleagues will be seriously abused, up 37% on two years ago,” he said.

To try to curb the rampant crime, Hood said the c-store specialist has invested £18m so far in 2024 on measures to help protect its staff, including the rollout of body-worn cameras and ‘fortified kiosks’.

“The investments we are marking are working and our colleagues feel safer, and we’re making them safer,” Hood insisted.

As a result of the surge in crime, some grocers such as Asda and Morrisons have begun the process of moving away from self-checkouts to combat theft. Hood says the Co-op will be following in their footsteps.

“We want to make convenience shopping more convenient,” he said. “And self-checkouts for our customers are something that makes it quicker and easier for customers to get in and out of our shops. So, they will continue to play a key part in our formats.”

Put it on the bill

Both Hood and Khoury-Haq said there were “green shoots” of hope for the mounting retail crime problem in the UK, with the passage of the government’s Crime and Policing Bill.

Two weeks ago, prime minister Keir Starmer told the Trades Union Congress that his government would “go further” to crack down on retail crime and the issue has been raised by retail trade union Usdaw repeatedly at this week’s Labour Party conference.

Khoury-Haq said the Co-op had already seen the situation improve in Scotland, where retail crime is already a specific offence, adding that she hopes the bill comes into effect in England and the rest of the UK “as soon as possible”.

“We’re campaigning hard to make that happen,” Hood added. “The reason we’re campaigning is because we know the bill will work.

“If you look at Scotland, where it’s already a standalone offence, 60% of reported incidents are resulting in an arrest compared with only 10% in England.”

A very Co-op Christmas?

Despite all the gloom around retail crime, the Co-op was keen to emphasise the things it had been doing right in the first half of the financial year – not least around its membership push.

Having effectively relaunched its membership offer earlier in the year, Hood said that, during the first half, the c-store specialist had grown its member network by 20% to more than 5.5 million.

This put the Co-op well ahead of its target to have 8 million members by 2030, he said, and also meant that more customers would be able to benefit from lower prices in the run-up to the crucial festive period.

“We’ve already invested another £55m in price this year,” he said. “Some £34m of that is into member prices, which include a further 117 member prices across branded and Co-op own-brand.

“So, we’ve now got nearly 300 member prices on fixed central lines within our business at the end of half one and sales penetration from members in our food stores has reached a historic high of 36.2%, with members averaging 13 visits every week.”

In terms of whether he was expecting a less subdued Christmas in terms of customer spending, given the green shoots of economic recovery, Hood was somewhat circumspect.

“It’s really hard to tell [how it’ll go],” he said. “Every year we go into Christmas thinking it’ll be about one thing, and it always seems to be slightly different when we get there.

“I think we have to bear in mind that, while inflation is down, customer confidence still isn’t particularly high.

“Customers will continue to be a little more cautious but, at the same time, we know from the number of products we’re selling in our more premium ranges that people are prepared to treat themselves.”