Costs rise despite a stronger balance sheet
Underlying costs increased 2% across the half, after the group absorbed £78 million of additional headwinds, including higher employer National Insurance contributions, a rise carried by operators across the food and drink franchises recruiting in the UK as much as by corporate estates.
Net debt fell to £239 million from £317 million, aided by the £350 million sustainability bond, which attracted demand 3.3 times its size. Active membership grew 11% to 7.5 million over the period.
Southern Co-operative merger faces a competition hurdle
The Competition and Markets Authority concluded the first phase of its review into the proposed merger on 15 September 2026, finding that the deal has resulted, or may be expected to result, in a substantial lessening of competition in some local markets. Co-op Group and Southern Co-operative now have the chance to offer undertakings addressing those concerns.
Without an acceptable remedy, the CMA has said it will refer the merger for an in-depth phase 2 investigation.
Neither party has said which local markets are affected. Overlapping catchments are the same question a franchised network settles through territory clauses in the franchise agreement rather than through a regulator.
