Major UK supermarket on brink of collapse and at risk of closing 300 stores

Southern Co-op members have been warned the group could fold unless it merges with its national counterpart (Picture: Getty Images)

A major UK supermarket may undergo a merger to save it from collapse following three years of losses.

Bosses at Southern Co-op have warned the chain faces insolvency unless it merges with the national Co-operative Group amid ‘difficult’ trading in the last few years.

The brand currently operates more than 300 food stores, funeral parlours and Starbucks Coffee branches across southern England.

While it shares some branding and products with its national counterpart, Southern Co-op remains a separate business.

The group posted operating losses of more than £23 million for 2025.

In a letter to members, chair Janat Paraskeva and CEO Ben Stimson said without the proposed merger, the group would likely ‘enter insolvency through administration’.

This would in turn ‘put jobs at risk, lead to the loss of stores and negatively impact our suppliers, they said.

Their letter read: ‘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.

‘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.’

A Co-op store in Raynes Park, south London (Picture: Getty Images)

It continued: ‘This is not a position we ever wanted to be in. Like you, we believe strongly in the value of an independent co-operative, and we have explored every realistic option to protect that.

‘It is not an easy decision, but it is the one that protects more jobs, more services, and more value for members than any other option available to us today.’

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 wrote: ‘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.’

Get in touch with our news team by emailing us at [email protected].

For more stories like this, check our news page.

Comments Add as preferred source