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The CI Coop has said it has cancelled bonuses it would otherwise have paid this year in a decision "that affects everyone in the business".
It comes after the retailer last night told its members that the next round of dividend reward payments would have to be slashed or even suspended in the wake of “extremely challenging market conditions”.
The retailer has also said that directors "did not receive a pay rise", having yesterday cited its financial performance in 2023 as the reason for the move, which will have to be put to a vote later this year.
A proposition allowing its board to determine if dividend rates should be reduced or if no dividend should be paid this year will be presented at its annual members meeting in May.
The announcement was met with backlash yesterday evening after members were informed, although Chief Executive Mark Cox stressed that the food retail sector has encountered "significant hurdles" over the past five years, stemming from various national and global events such as inflation, Brexit, the pandemic, and conflicts worldwide.
Nonetheless, customers were quick to voice their frustration on social media, with one islander commenting that the Coop was "losing customers by the second", while another warned that "there will be an uproar" if the dividend is not paid this year.
The Coop has warned that this year's dividend payment might need to be reduced - or even suspended.
A Coop spokesperson said: "We want to address that all bonuses have been cancelled; this decision affects everyone in the business. Additionally, directors did not receive a pay rise."
A section of the Coop's "Member Dividend frequently asked questions" section of its website also stated that: "Given the economic uncertainties, the decision was made to prioritise the financial stability and sustainability of CI Coop to safeguard jobs and maintain ongoing operations."
Speaking to Express, Mr Cox reiterated that the retailer was "operating in some very challenging economic conditions".
Pictured: Mark Cox said that Cox said that the Coop was "operating in some very challenging economic conditions".
He explained that – having considered the Coop’s financial performance in 2023 – it was “clear” that the amount paid out this year would need to be lower than the usual 4% dividend rate, or potentially suspended.
He continued: “We wanted to be open and transparent with our members that this is the likely course of action."
Backlash as Co-op considers slashing divvy in "unprecedented" move
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