Southern Co-op has issued a stark warning that 300 of its stores could face closure if a proposed merger with the Co-op Group does not proceed. In a letter to its members, the company's leadership revealed that the business has been loss-making for three consecutive years and risks entering administration should the deal fall through.
Urgent Warning to Members
The letter, sent ahead of a ballot on the merger, states: "Southern Co-op has made losses for the past three years." It adds that if the merger does not go ahead, "the most likely outcome is that Southern Co-op will enter insolvency through administration," which would put jobs at risk, lead to the loss of stores, and negatively impact suppliers.
Details of the Proposed Merger
The Co-op Group plans to take over Southern Co-op in a deal encompassing 300 food stores, funeral homes, and Starbucks coffee branches. The transaction requires approval from Southern Co-op's approximately 300,000 members, while the Co-op Group has seven million members. The financial terms of the potential transaction have not been disclosed.
Southern Co-op was founded in Portsmouth in 1873 and operates primarily across the south of England, including London, under the Co-op Food and Welcome brands. The Co-op Group, in contrast, runs over 2,300 food stores, 800 funeral homes, a wholesale business, legal services, and an insurance business.
Leadership Perspectives
Ben Stimson, Southern Co-op's chief executive, expressed confidence in the merger, stating: "The Co-operative Group shares our values and our commitment to democratic membership, ethical sourcing and fair reward, as well as our dedication to supporting local communities. By coming together, we can secure the co-operative future of Southern Co-op as part of a stronger combined Co-op Group, whilst creating an even stronger voice nationally and internationally to advance the co-operative cause."
Kate Allum, interim chief executive of the Co-op Group, highlighted the benefits for members: "Joining forces across Co-op Group and Southern Co-op will create new opportunities for members to have access to a greater range of benefits across a wider society, with more trading opportunities, and in turn more benefits for them and their communities."
Janet Paraskeva, Chair of the Southern Co-op Board, added: "This proposal has been carefully considered, and we believe it represents the best path forward for Southern Co-op. We are now asking our members to consider the proposal and have their say. This is their decision, and we are committed to providing all the information they need to make an informed choice about the future of their co-operative."
The merger, if approved by members, is expected to be completed in the final quarter of 2026.
