Archive · 23 Sep 2026
Co-op Cuts Jobs as National Insurance Costs Rise Sharply
Co-op is a large group that runs food shops and funeral homes.
Its costs have gone up, partly because it must pay more National Insurance for its employees.
The company says this bill rose by £50m a year.
Co-op is trying to save £200m, so some jobs are being reduced.
It has not said exactly how many jobs will go.
Sales improved, but the company still lost £92m in the first half of the year.
A cyberattack also hurt its revenue and profits.
Co-op is using electronic price labels to save staff time and is seeking approval to buy Southern Co-op.
The Co-operative Group’s annual employer National Insurance bill has risen from £100m to £150m.
The group is targeting £200m in savings and reducing employment in some areas, mainly through natural turnover.
Co-op reported a £92m first-half loss despite group sales rising 2.4 per cent and food sales increasing 2.6 per cent.
The 2025 cyberattack caused a reported £206m revenue hit and £80m impact on profit.
Co-op is rolling out electronic shelf-edge labels and pursuing a takeover of Southern Co-op, which is under Competition and Markets Authority review.
- Who
- The Co-operative Group, led on an interim basis by Kate Allum, and its employees.
- What
- Co-op is cutting costs and reducing employment in some areas after higher expenses contributed to a £92m first-half loss.
- When
- The results cover the period to July 4; the latest workforce changes and savings plan are ongoing.
- Where
- Across Co-op’s food-store, funeral-home and other operations; the group runs more than 2,300 food stores and around 800 funeral homes.
- Why
- Employer National Insurance costs increased by £50m annually, while the 2025 cyberattack and other higher costs also affected the business.
Cost-cutting rationale
Workforce and competition concerns
Reducing employment
Cost-cutting rationale
Co-op says it must reduce costs because National Insurance, employment taxes, the cyberattack and other expenses have increased pressure on the business.
Workforce and competition concerns
Employees and other stakeholders may face reduced employment, although Co-op says the changes are largely being managed through natural turnover and are not stark.
Southern Co-op takeover
Cost-cutting rationale
Co-op is pursuing the deal, which it says would add around 330,000 members and more than 300 food, funeral and Starbucks sites.
Workforce and competition concerns
The Competition and Markets Authority is examining the transaction and could launch a deeper investigation if competition concerns are not resolved.
- Annual National Insurance bill
- Rose from around £100m to £150m.
- Savings target
- £200m.
- First-half result
- £92m loss, compared with a £75m loss in the same period last year.
- Group sales
- Increased 2.4 per cent in the first half.
- Cyberattack impact
- A reported £206m hit to revenue and £80m impact on profit.
- Food-store network
- More than 2,300 stores.
- Planned acquisition
- Southern Co-op, potentially adding more than 300 sites and around 330,000 members.