Co-op Group plans to merge with Southern Co-op in 300-shop deal

Proposals for merger would add hundreds of shops plus three crematoria to retail giant’s chain, subject to member approval

The Co-op Group is planning to absorb Southern Co-op in a merger that would bring hundreds of food and funeral outlets into the Manchester retail giant’s portfolio.

The two societies have announced proposals that would require member approval before proceeding.

The deal involves integrating Southern Co-op’s 300,000 members into the seven million-strong Co-op Group, along with its approximately 300 food, funeral and Starbucks coffee branches.

Co-op Group would also gain its three crematoria under the arrangement, allowing it to re-enter the burgeoning market alongside its existing funeral services.

The organisations declined to reveal the value of the potential transaction.

Southern Co-op is headquartered in Portsmouth and operates predominantly across the south and south west of England, including London, Bristol and Exeter, trading under the Co-op Food and Welcome brands. It was established in Portsmouth as a co-operative in 1873.

Co-operatives are businesses owned and controlled by their members, who have a direct say in how the organisation is run.

Southern Co-op members will be given a vote on the proposals, which, if backed by members and regulators, are anticipated to be completed in the final quarter of 2026.

The merger would be facilitated through a process known as “transfer of engagements”, which enables two societies to combine.

Ben Stimson, Southern Co-op’s chief executive, said the deal would safeguard the future of the business, which has recently struggled with declining profits and rising costs. He said: “By coming together, we can secure the co-operative future of Southern Co-op as part of a stronger combined Co-op Group, while creating an even stronger voice nationally and internationally to advance the co-operative cause.”

Kate Allum, Co-op Group’s interim chief executive, said: “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.”