Co-op Group to post losses over £2bn

On March 26, Co-op Group is expected to announce losses of more than £2bn, which is by far the worst in its history.

16:06 26 February 2014

Co-op is expected to announce more than £2bn losses on March 26. When confirmed, the figure will be by far the worst in the veteran company’s history.

Its chief executive, Euan Sutherland, is also expected to announce on Saturday that the company’s substantial farming operation, which includes 15 farms, will be sold. Members will also hear Co-op’s plans of selling its 750 pharmacies.

The BBC reported via ‘well-placed sources’ that the main reason for the losses was the group’s banking arm, which was rescued at the end of 2013 – together with a reduction in the value of the stores and the write-down it acquired with the Somerfield takeover of 2009. 

The Co-op Group has registered a pre-tax loss of £559m in the first half of 2013, following a loss in the previous year (a pre-tax loss of £648million).

In the next four years, the group is expect to cut running costs of £500million and this includes cutting thousands of jobs by 2017 particularly in the head office and in support positions.

Early leaks of the scale of the reconstruction of the group are fuelling tension between the thousands of activists amid the group’s millions of members and the professional management led by Sutherland.

"We worry that the board is exaggerating the scale of the crisis, including losses, to turn the Co-op into much more of a conventional business, and move it away from its democratic and ethical roots," said one.