Interview: How the head of the cooperative, Shirine Khoury-Haq, restocked the shelves

It’s a very rare event, especially when prices are through the roof, for staff to say thanks but no thanks when bosses offer them a raise.

Yet, says Shirine Khoury-Haq, the Cooperative’s executive director, that’s exactly what happened at the funeral food group.

“When we found out that the cost of living crisis was really going to affect our colleagues, we asked them what we should do,” he recalls.

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

Instead, they asked for spending money to be paid on their co-op membership cards (the group is owned by its members) plus a deep discount on food purchases.

So £12m piled up on the cards and a whopping 30 per cent discount on food was offered. The Cooperative also took charge of the tax to be paid on these new benefits.

As it turned out, not a bad move for the 55,000 people who work in the group’s food, funeral, insurance and legal services businesses, because the UK’s annual rate of food inflation is the highest in Western Europe, reaching a rate of 45 years. high of more than 19 percent in April.

Thus, cooperative workers have been at least partially shielded from price increases that have pushed interest rates to a 15-year record.

Khoury-Haq, who oversees 2,400 stores, was not among the supermarket bosses who recently appeared before lawmakers to explain why prices have soared and to answer questions about whether they have been profiting.

But she maintains that there have been no excessive charges or opportunism. “I don’t think anyone is profiting,” she says. “Meat, dairy, vegetables, fats and oils are up 20 to 30 percent. Our big intention now is to bring prices back down to make sure we offer the absolute best value.”

To that end, the Co-op membership card now offers special prices, open to all and costing £1, just like Tesco’s Clubcard prices and the new Sainsbury’s Nectar.

Currently, some 4.5 million people are members of the Cooperative and Khoury-Haq’s goal is to recruit another million within five years.

> Who wins the supermarket loyalty card price war?

The 51-year-old is not your usual cooperative boss.

She is their first boss and the first from an ethnic minority. She hasn’t risen through the ranks either. She has never stacked cans on shelves or managed a grocery store. She is a finance and operations professional who has worked her way up through McDonald’s and IBM in the US.

He worked at Lloyd’s of London before coming to Manchester to manage the co-op’s finances, along with its legal and funeral services businesses, in 2019, just before covid struck.

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

“I worked for McDonald’s,” she says. I know how to run a retail operation. The work I did there was to take underperforming regions and turn them around. So I absolutely know how supply chains work, how logistics work, how stores work, how you treat customers and how you sell.’

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

He 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.

He was given the top job, with a salary of £750,000, in the spring of last year and quickly went to work tackling the group’s growing problems. The company’s supermarkets had huge gaps in the shelves because a computer reordering system was failing, runaway inflation was looming and the group was at risk of sinking under a massive £920m of debt.

“There was a job to do very, very quickly,” he says. With experience working as a ‘fixer’ at IBM, he says he ‘knew what we had to do’ to fix the problematic computer system. Twelve months later, store availability is now 96 percent.

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

Members’ prices in the Co-op are compared to Sainsbury’s expanded nectar prices and Tesco’s successful Clubcard pricing scheme

By the end of September, 400 jobs had been cut, mainly in the head office, resulting in cost savings of £100m. The upgraded IT system has boosted cash generation and over £300m was removed from the debt pile by selling the Co-op’s 129 petrol stations to Asda.

But clearly there is more work to be done and more debt to be paid. The Co-op recently reported annual profits of just £247m on total revenue of £11.5bn, and that was after the boost from the sale of service stations. Khoury-Haq says the group has gone through “decades of inefficiency” and it will take time to fix it.

There will soon be a new face joining her in the boardroom to offer advice. Last week, the Cooperative named Debbie White, 61, to take over as group president. An accountant by training, White was previously CEO of the Interserve outsourcing group.

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

The Co-op has always put people and communities first since it opened its first store in Rochdale in 1844. Khoury-Haq says she shares those values ​​and has therefore initiated a series of new policies to help people to “bring your whole being” to work. . That includes a new bereavement leave and unlimited fertility treatment leave.

These are issues especially close to Khoury-Haq’s heart. He lost his first daughter, conceived after years of fertility treatment, just hours after she was born.

It has also introduced a menopause policy that “opens up the conversation for men to understand and support women in the workplace.”

She adds: ‘There’s nothing wrong with understanding what might be going on with your wife or your partner or your mother.

“We see a lot of women drop out of the workforce or slow down in their careers because of this thing that hits them at a certain age.”

Another change Khoury-Haq has embraced is working from home, which workers at the Cooperative’s head office have enthusiastically embraced. The nine-story headquarters in Manchester now has several floors without lighting as many employees work from home.

The building, he admits, is now too big. Before Covid, more than 3,000 people piled in 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 couple of weekdays.

She is completely unconcerned and says she sees no problem. “We’ve seen zero decline in productivity,” she says proudly.

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

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