Coop's €160M Member Payout Hides Supermarket Reality: Half Its Stores Still Losing Money

Coop's Earnings Nearly Double, Yet Retail Stores Still Losing Money

Coop Alleanza 3.0, Italy's largest cooperative grocery chain, announced 2025 fiscal year results in early 2026, posting consolidated net profit of €38.5M—more than double the €18M result from 2024—but the improvement masks a troubling reality: the company's actual store operations remain unprofitable. The retail segment lost €15M in 2025, a substantial gap that undercuts the broader financial recovery and raises questions about whether Italy's traditional supermarket model can survive without heavy corporate cross-subsidies.

Why This Matters

• Retail operations still underwater: Despite halving losses from €46M to €15M, Coop's stores generated negative earnings—a critical metric for any grocer

• Member payouts rising despite store struggles: The cooperative distributed €42M to members through savings programs in 2025, up €12M from 2024, funding the benefit through non-retail income streams

• Network modernization halfway complete: Roughly 50% of Coop's store base has been renovated; the older half remains a drag on performance and competitiveness

Where the Real Profit Is Coming From

The story behind Coop's headline earnings reveals the structural challenge facing Italian supermarket chains. Investment income and financial operations—not grocery sales—drove the 2025 turnaround. The cooperative's result (the profit attributable to the cooperative itself, distinct from consolidated group profit) jumped to €50.2M from €11M, a gain rooted almost entirely in dividend distributions from holdings in Unipol Assicurazioni and IGD SiiQ, the real estate company that owns and operates many Coop store properties.

The parallel structure—where the cooperative owns significant real estate and insurance stakes alongside its retail operations—has become essential to keeping member benefits flowing. Financial and real estate operations contributed substantially to offsetting retail shortfalls that would otherwise erode member value.

President Domenico Livio Trombone acknowledged the persistence of core business weakness, noting that "the last effort must be made to recover" in retail. That phrasing, while carefully diplomatic, signals management's recognition that grocery operations alone are insufficient to sustain the chain's financial model.

Sales Growth Masks Market Share Loss

Coop reported a 2.3% increase in network sales for 2025, reaching €5.869B—an acceleration compared to the prior year's modest €9M gain. The cumulative sales trajectory since the 2016 merger stands at 26.3% growth overall. Yet the cooperative lost 0.1 percentage points of market share during the same period, suggesting competitors captured a larger slice of Italy's expanding grocery market.

Fresh and specialty categories provided the sales lift. Produce sales climbed €23.3M with volume growth of 5.3%, while ultra-fresh items—dairy, prepared foods, meats—rose €38.4M on 3% volume increases. These segments are structurally higher-margin and more difficult for online-only rivals to replicate, making them strategic pillars for Coop's differentiation strategy.

Coop's private-label penetration reached 31% of sales in 2025, substantially above the Italian GDO average of 30.4%. Private-label goods—typically 3-5 percentage points higher margin than national brands—provide crucial buffer against supplier price pressure and Amazon's encroachment. Yet even with this favorable product mix and sales momentum, the core retail operation remains trapped below breakeven.

Member Benefits Funded by Investment Returns

The €160M that Coop invested in member advantages during 2025 represents an effective redistribution of corporate profits back to the cooperative's 8+ million cardholders. This includes exclusive discounts, loyalty rewards, and anti-inflation initiatives. An additional €30M was earmarked to combat price increases, with another €11M already deployed in early 2026.

The social lending program—a distinctive feature of Italian cooperatives that allows members to deposit savings directly with Coop at preferential rates, functioning as both a community investment vehicle and savings account—expanded significantly. Members' deposits in preferential savings vehicles reached €2.851B, reflecting strong confidence in the cooperative structure even amid broader economic headwinds. The average interest rate paid to member-depositors climbed to 1.5% from 1.1%, translating to €42M in member interest income—€12M higher than 2024. A separate €364M tranche of fixed-term lending subscriptions indicates sustained appetite for member-owned financial instruments.

For the typical Coop cardholder in urban centers like Milan, Rome, or Bologna, these payouts are meaningful. A depositor holding €10,000 in the social lending program now earns €150 annually versus €110 previously—modest by international standards, but competitive in Italy's low-rate environment and especially valuable for retirees seeking yield.

What This Means for Your Shopping

Despite the financial complexity, Coop cardholders should see no reduction in member benefits for 2026. The cooperative has committed to continuing discount programs and social lending interest payments, funded by its diversified holdings. However, store renovation timelines may affect your local Coop—check with store management if your location is scheduled for upgrades, which typically involve temporary closures or reduced hours. Roughly 50% of the network has already been modernized, with plans to continue renovations through 2026 and beyond as part of the broader network transformation strategy.

Infrastructure Overhaul Underway, But Half the Network Remains Outdated

Coop allocated over €100M annually to network modernization, digital systems, and new store formats between 2025 and the strategic plan horizon. Three new stores opened in 2025, while 40 locations underwent comprehensive renovations—bringing the modernized proportion of the network to approximately 50%. The older half, often 1990s or early-2000s format stores, consume disproportionate labor and energy resources while failing to compete aesthetically or functionally with newer discount formats and specialty retailers.

The planned 2030 Strategic Plan, currently in development, will reportedly focus on "reinventing the hypermarket model," signaling recognition that the traditional massive-format store—once a European retail powerhouse—no longer aligns with consumer behavior. Smaller urban footprints, faster checkout experiences, and integrated omnichannel fulfillment are becoming minimum requirements, not differentiators.

Positioning in a Changing Italian Market

The Italian GDO (Organized Retail) expanded 4.3% in 2025, surpassing the prior year's 2.3% growth, with net sales reaching €109.8B. E-commerce channels posted 7.8% gains, and mid-to-large hypermarkets unexpectedly reversed their historical decline, achieving 5.8% growth—a surprise reversal that may reflect pandemic-era e-commerce fatigue and a temporary swing back to in-store shopping. Private-label products hit a record 30.4% market share, projected to reach €31.5B by end-2025.

In this context, Coop's 2.3% sales growth trails the sector average slightly, though the cooperative's member-first governance model does not optimize for pure growth velocity. Competitors like Esselunga, Carrefour, and Lidl have posted faster growth in recent years, though direct quarterly comparisons remain difficult due to varying reporting calendars and holding structure complexity.

The broader consolidation pressure in Italian retail continues. Regional chains and smaller operators have faced attrition, while large multinational groups and domestic consolidators tighten their grip on urban and suburban markets. Coop's retention of a 31% private-label share and strong fresh-category performance provides differentiation but cannot fully compensate for the operational inefficiencies baked into half the store portfolio.

2026 Outlook: Bracing for a Tougher Year

President Trombone has characterized 2026 as "more critical" than 2025, citing international instability, potential fuel price escalation, and probable contraction in consumer discretionary spending. The cooperative is preparing defensive maneuvers: accelerated price-containment measures, deeper supplier negotiations to lock in favorable terms, and continued network renovation prioritizing high-traffic and high-potential locations.

A symbolic initiative launching this spring is the relaunch of "Più Vicini" (Closer Together), a grants program channeling cooperative surplus to third-sector nonprofits and social enterprises. Applications opened April 13, 2026, and will close June 21, with member and customer voting scheduled for October. The program aligns with Coop's sustainability commitment to contribute to 13 of the United Nations' 17 Sustainable Development Goals—positioning the cooperative as a socially embedded institution rather than a pure profit-maximizing entity.

This differentiation strategy matters increasingly. Italian consumers, especially in cities, demonstrate willingness to accept slightly higher prices at cooperatively-owned retailers in exchange for perceived ethical alignment, member benefits, and local support. Whether that preference translates into sufficient margin expansion to return retail operations to profitability remains the central question facing the board and membership.

A Structural Dilemma for Traditional Supermarkets Across Europe

Coop's predicament—profitable overall earnings masking retail operational losses—reflects a deeper challenge gripping traditional supermarket chains across Europe. High fixed costs (labor, real estate, utilities) remain largely immobile even as consumers shift purchasing patterns: more frequent small trips, increased online penetration, and gravitational pull toward discounters and convenience formats. Coop's scale advantage and member ecosystem help buffer this transition, yet the €15M retail loss signals that even cooperative structure and private-label strength cannot immediately resolve the underlying economic model breakdown.

The consolation for members and community stakeholders: Coop's diversified asset base—including real estate holdings and financial instruments—provides runway for the cooperative to invest in network modernization, member benefits, and social initiatives without the existential urgency facing investor-owned chains that cannot offset store underperformance through portfolio company dividends. Yet runway is not strategy. Management's emphasis on 2026 being "more critical" suggests urgency in the boardroom to close the retail gap before the combined headwinds of consumer softness and fuel inflation make the task even harder.