Southern Co-op’s executive leadership has urged its members to vote in favour of a merger with Co-op Group to create a major cooperative society in the UK.

The major shake-up was announced earlier this month, which would result in 300,000 Southern Co-op members joining the 7m Co-op Group members as part of an enlarged business.

In a letter addressed to members, chair and CEO of Southern Co-op, Janet Paraskeva and Ben Stimson, stated that the proposed deal will create more overall benefits, with the business posting losses for the past year.

Additionally, the letter cited “difficult trading conditions” and stated that the company has been dependent on support from banks and suppliers to continue operating.

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.

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“That support cannot now be increased within the time available. To continue trading without a merger, we would need a significant level of financial support, and we have not received any offers of funding at that level.”

The executive leadership team stated there was no feasible solution to continue operating as an independent co-operative and that the merger with Co-op was the only solution to save the business.

They added: “If the merger does not go ahead, the most likely outcome is that Southern Co-op will enter insolvency through administration. This would put jobs at risk, lead to the loss of stores and negatively impact our suppliers.”

According to Southern Co-op, the decision to merge is one that would “protect more jobs, more services, and more value for members than any other option available to us today”.

The final decision is subject to approval by Southern Co-op members and mandatory regulatory approvals, with the deal expected to close in Q3 2026.