British supermarket chain on brink of collapse as 300 stores at risk of closure

Temie Laleye
Fri, 24 Apr 2026 09:57:23 +0000

A major British supermarket chain has warned it could collapse, putting hundreds of stores and thousands of jobs at risk.

The business is now scrambling to secure a merger deal as it faces the threat of going bust.

Southern Co-op has warned members it faces collapse into administration following three consecutive years of financial losses.

The regional supermarket chain, operating more than 300 food stores, funeral homes and coffee shops across southern England, says merging with the national Co-op Group represents its sole path to survival.

Thousands of retail workers now face an uncertain future as the business teeters on the edge of insolvency.

Company leaders sent a letter to members on 22 April setting out the dire situation.

Members will cast their votes on the proposed merger at special meetings taking place on May 6 and May 21, with the outcome determining whether the business survives.

Chief executive Ben Stimson and chair Janet Paraskeva issued the stark warning to give members the "full picture" of the company's deteriorating health.

The business anticipates operating losses exceeding £20million in the coming financial year.

Cost-cutting efforts including a recruitment freeze and reducing office space have proved insufficient to stem the bleeding.

Banks and suppliers have kept the company afloat as trading conditions deteriorated over the past year, but the leadership confirmed "that support cannot now be increased within the time available."

No alternative funding offers have materialised to allow Southern Co-op to continue as an independent business.

A cyberattack targeting the Co-op Group last year added further strain to an already struggling operation.

The leadership team has been blunt about what happens if members reject the deal.

"If the merger does not go ahead, the most likely outcome is that Southern Co-op will enter insolvency through administration," the bosses stated in their letter.

An external administrator would then be brought in to sell off remaining assets.

The consequences would be severe: jobs placed at risk, stores shuttered, and suppliers left facing losses.

"Southern Co-op has made losses for the past three years," the letter acknowledged, adding that "over the last year, trading has become more difficult, and we have relied on ongoing support from our banks and suppliers to continue operating."

Approval of the merger would create a substantial co-operative enterprise with combined sales of approximately £11.5billion and close to 2,500 stores nationwide.

The board maintains the deal would deliver "immediate financial stability" whilst safeguarding existing stores and protecting thousands of jobs.

Despite preferring independence, the leadership acknowledged there was no viable alternative.

"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," the bosses told members.

The company is now urging members to back the takeover when they gather for the crucial votes in May.