Interview: How Co-op boss Shirine Khoury-Haq got shelves full again

It is a very rare occurrence – especially when prices are skyrocketing – that staff say thanks but say no when bosses offer them a raise.

Yet, says Shirine Khoury-Haq, CEO of the Co-op, that’s exactly what happened at the food-to-funerals group.

“When we knew that the cost-of-living crisis was really going to hit our colleagues, we asked them what we should do,” she recalls.

Other supermarket chains have raised their hourly wages to more than £11 this year, but Co-op staff refused an increase “because they could end up making less, when you look at the tax and benefit implications”.

Instead, they asked for pocket money to be put into their Co-op membership cards — the group is owned by its members — plus a deep discount on food purchases.

So £12 million was stacked on the cards and offered a whopping 30 per cent discount on food. The Co-op then also took care of the tax to be paid on those new benefits.

As it turned out, it wasn’t a bad move for the 55,000 people who work in the group’s food, funeral, insurance and legal services businesses, as annual food inflation in the UK is the highest in Western Europe and a 45 -annual inflation achieved. peak of more than 19 percent in April.

Cooperative workers are therefore at least partially shielded from the price hikes that have pushed interest rates to a 15-year record.

Khoury-Haq, who oversees 2,400 shops, was not among the supermarket bosses recently dragged before MPs to explain why prices have skyrocketed and answer questions about whether they made a profit.

But she claims there has been no overload or opportunism. “I don’t think anyone is making a profit,” she says. ‘Meat, dairy, vegetables, fats and oils have increased by 20 to 30 percent. Our big intention now is to bring prices all the way down again to make sure we offer the absolute best value.”

To that end, the Co-op Membership Card now offers special pricing – open to all and costs £1, just like Tesco’s Clubcard and the new Sainsbury’s Nectar prices.

There are currently about 4.5 million members of the Co-op and Khoury-Haq’s goal is to recruit another million people within five years.

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The 51-year-old is not your usual Co-op boss.

She is the first female chef and the first with an ethnic minority background. Nor has she risen through the ranks. She’s never stacked cans on shelves or managed a food store. She is a finance and operations professional who has worked her way up through McDonald’s and IBM in the US.

She worked at Lloyd’s of London before arriving in Manchester in 2019, just before Covid hit, to manage the Co-op’s finances, along with funeral and legal services.

However, she is not happy about the suggestion that she may not know enough about the harsh and complex world of food retailing.

“I used to work for McDonald’s,” she says. ‘I know how to run a retail business. The work I did there was to take underperforming regions and turn them around. So I definitely know how supply chains work, how logistics work, how stores work, how you deal with customers and how you sell.’

Born in Beirut to a Turkish mother and a Palestinian father who was in the oil business, by the age of 12, Khoury-Haq had lived on every continent except Antarctica.

She has attended three universities – in Australia, the US and the UK – speaks five languages ​​and holds four passports. Her husband is Pakistani and her six-year-old twin daughters are British.

She landed the top job – with a salary of £750,000 – in the spring of last year and quickly got to work dealing with the group’s mounting problems. The company’s supermarkets had large gaps on their shelves as a computer reordering system failed, runaway inflation loomed and the group threatened to collapse under a towering £920 million debt.

“There was a job that needed to be done very, very quickly,” she says. With a background as a “fixer” at IBM, she says she “kind of knew what we had to do” to fix the troublesome computer system. Twelve months later, availability in stores is now 96 percent.

Then it was about the threat of inflation. “We had to make sure we could weather that storm, so we had to cut costs,” she says.

By the end of September, 400 jobs had been cut, mainly at headquarters, generating £100 million in cost savings. The upgraded computer system has boosted cash generation and more than £300m was wiped off the mountain of debt by selling the Co-op’s 129 service stations to Asda.

But there is clearly more work to do and more debt to pay off. The Co-op recently reported an annual profit of just £247m on a total turnover of £11.5bn, and that was after the boost from petrol station sales. Khoury-Haq says the group has been through “decades of inefficiency” and it will take time to fix it.

Soon a new face will be standing next to her in the boardroom to offer advice. Last week, the Co-op appointed Debbie White, 61, as the group’s president. An accountant by training, White was previously CEO of outsourcing group Interserve.

Khoury-Haq points out that the cooperative will never make the same profit as other supermarkets, because that is not the goal. “We serve communities where there are no other stores,” she says. “We want to do that and it costs money.”

Since opening the first store in Rochdale in 1844, the Co-op has always prioritized people and communities. Khoury-Haq says she shares those values ​​and has therefore introduced a range of new policies to help people “bring their whole selves to work.” . That includes new bereavement leave and unlimited leave for fertility treatments.

These are issues that are particularly close to Khoury-Haq’s heart. She lost her first daughter, conceived after years of fertility treatments, just hours after she was born.

She has also introduced a menopause policy that “opens up the conversation so men understand and so they can support women in the workplace.”

She adds, “There’s no harm in understanding what could happen to your wife, your partner, or your mother.

“We see a lot of women quitting jobs or slowing down their careers because of this thing that happens to them at a certain age.”

Another change Khoury-Haq has embraced is working from home, which has been welcomed with enthusiasm by Co-op headquarters staff. The nine-storey headquarters in Manchester now has several unlit floors as so many staff work from home.

The building, she admits, is too big now. Pre-Covid more than 3,000 people piled on to work there every day. Now there are 500 to 600 at their desks at the beginning and end of the week and maybe 800 on a few weekdays.

She’s not worried at all and says she doesn’t see any downsides. “We’ve seen zero productivity loss,” she says proudly.

Khoury-Haq laughs out loud at the idea that some might consider her a waking boss.

“I think being awake just jumps on the bandwagon,” she says. “I just want everyone to live their best life and be treated equally.”