Whatever the situation at the Co-op, retail staff across the board are increasingly unhappy.
Retail runs on people. Every insight, from the shop floor to the head office, shapes how retailers operate and the way they serve customers. And when employees feel heard, ideas flow faster and problems get solved sooner. This puts retailers in a better position to survive (and thrive) in a challenging market.
That’s why the allegations surrounding the Co-op are so concerning. A letter sent to the Co-op board alleged “fear and alienation” among senior staff, who said they felt unable to speak up in front of leadership. The letter linked these concerns to falling morale, senior departures and operational challenges, including the response to the retailer’s cyberattack and the integration of its new group commercial and logistics division.
The Co-op rejected the claims, insisting colleague engagement remained high and decision-making reflected a wide range of views across the business. Even if that’s true, the fact is that employee engagement is increasingly difficult in these challenging times. And not just on the shop floor.
People matters
Sector-wide data from the Retail Trust shows why this matters. In its Retail People Index Q3 2025, which spans roles in stores, distribution, customer service and head office, it shows employee happiness has dropped to 58%. Over half of retail staff (52%) are now at high risk of leaving.
Older millennials are particularly vulnerable, the report outlines, with 60% now considering a move outside the sector. It is at this stage in their careers that people often reassess their progress and goals, with feelings of being underdeveloped or their efforts going unrecognised driving an overall sense of dissatisfaction.
Of course, the cost of living crisis continues to add pressure to the retail workforce, but – despite received wisdom to the contrary – pay isn’t actually the main issue. Yes, employees are openly calling for better pay, but they also want more appreciation for their work, and more chances to learn and progress in their career. Retailers can capitalise on this opportunity to improve how they support staff, helping them keep those employees for longer.
Presenteeism has also hit record levels, with 47% of employees showing up to work while unwell, physically or mentally. And the result is profound: lower productivity, disengagement and drained morale all ripple through teams, creating operational and cultural challenges that can be hard to disentangle from the rest of the business. The report puts this into unavoidable cold hard facts: presenteeism driven by poor mental health cost UK businesses £51bn in 2024.
External pressures such as the well-documented retail crime epidemic are also adding strain, with shopworkers facing abuse and violence every day.
Together, these factors create the very real financial and operational impacts of disengagement, fuelling a vicious cycle that few retailers can afford to ignore. After all, high staff turnover proves costly: replacing an employee earning £25,000 per annum can cost retailers around £30,000.
Going the extra mile
There’s a clear solution to all of this. Engagement thrives when staff feel valued, supported and able to contribute. According to the CIPD Good Work Index 2025, employees who feel positive and engaged at work perform better are around 25% more likely to go the extra mile and – crucially – are far less likely to consider quitting.
There are myriad ways retailers can kick engagement into action, such as introducing supportive line managers, creating channels for employees to be heard and putting mental wellbeing front and centre.
It’s a no-brainer. Leading with engagement helps retailers tackle disruption, keep their best people, and serve customers better. Listening to your people isn’t just the right thing to do – it’s good business sense.
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