A major UK supermarket chain is on the brink of collapse and may be forced to close hundreds of stores unless a merger is approved. Southern Co-op, which operates more than 300 food stores, funeral parlours, and Starbucks Coffee branches across southern England, has warned it faces insolvency without a merger with the national Co-operative Group.
Three Years of Losses
The group posted operating losses of over £23 million for 2025, following three consecutive years of financial decline. In a letter to members, chair Janat Paraskeva and CEO Ben Stimson said that without the proposed merger, the group would likely enter insolvency through administration. This would put jobs at risk, lead to the loss of stores, and negatively impact suppliers.
The letter stated: “Southern Co-op has made losses for the past three years. Over the last year, trading has become more difficult and we have relied on ongoing support from our banks and suppliers to continue operating. That support cannot now be increased within the time available.”
No Other Options
According to the letter, continuing to trade without a merger would require a significant level of financial support, but no offers of funding at that level have been received. The leaders stressed that this was not a position they ever wanted to be in and that they believe strongly in the value of an independent co-operative. However, they have explored every realistic option to protect the business and concluded that the merger is the best path forward to protect jobs, services, and value for members.
Members have been invited to a special meeting next month to vote on the group’s future. Among those supporting the move is Charlotte de Costa, a store manager from Portsmouth, who warned that stores would cease trading if the merger did not go ahead. She said: “It’s as cut throat as it reads. If we merge, it gives us the best chance to stay trading, protect jobs and gives us a better chance of remaining as your local stores. Voting against, we will cease trade. There is no other options. These have all been explored. We cannot remain independent.”
While Southern Co-op shares some branding and products with its national counterpart, it remains a separate business. The proposed merger would combine the two entities, potentially saving the chain from collapse and preserving thousands of jobs across southern England.
