Midcounties Co-operative and Central Co-op have announced plans to undergo a merger that would combine the two independent retailers.

The combined co-operatives would generate annual sales over £1.8bn and merge over one million members and 13,000 store colleagues.

Elaine Dean, president of Central Co-op, said: “As co-operators, we know that by working together, we can achieve more for our members, colleagues and communities.

“By combining our strengths, we can create a co-operative society that is more influential, more resilient and more ambitious, while helping ensure that the co-operative movement continues to grow and inspire. We look forward to continuing discussions with the Midcounties Board over the coming weeks.”

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Upon approval from the board of the two Societies, the two co-operatives would join into a single business.

This is a strategic move to increase operational efficiencies and would provide significant economies of scale to the two co-operatives.

Phil Ponsonby, chief executive of Midcounties Co-operative, added: “We have a unique opportunity to create a Society for the future, something that reflects the priorities of our members and addresses the challenges of our time.

“This potential merger would strengthen our ability to innovate, invest and cross-market a broad family of businesses to create a strong and stable platform for future growth.”

As part of the agreement, the societies will maintain their independent identities after the merger.