Southern Co-op, the independent retail cooperative, is facing imminent administration with over 300 stores at risk, according to multiple reports. The society has recorded losses for the past three consecutive years and expects operating losses to exceed £20 million in the current financial year, sources said.
Cost-cutting measures, including a recruitment freeze and downsizing office space, have failed to halt the decline. In a letter sent to members on April 22, chair Janet Paraskeva and chief executive Ben Stimson warned that the society has relied on ongoing support from banks and suppliers to continue operating, but that support cannot be increased within the time available.
Southern Co-op is now seeking a merger with the national Co-op Group to avoid insolvency. The leaders said they have repeatedly asked whether there is another option, but the honest answer is that there is no solvent alternative available that could be delivered in the timeframe without exposing the business to much greater risk. They described the merger as the decision that protects more jobs, more services, and more value for members than any other option.
If members reject the merger, the business will most likely face administration, putting jobs at risk and leading to store closures. Crunch meetings will be held on May 6 and May 21 for members to vote on the merger. The exact number of jobs at risk has not been confirmed, and the terms of the proposed merger with the Co-op Group have not been disclosed. It remains unclear what will happen to Southern Co-op's assets if administration occurs.