The Co-op Group is preparing to takeover the Southern Co-op, in a merger which would bring a major shakeup to the retail and funeral giant in its bid to move on from a crushing cyber attack. The deal would see the group snap up around 300 food stores, funeral branches
Felix Armstrong
Thursday 09 April 2026 9:23 am
The Co-op Group is preparing to takeover the Southern Co-op, in a merger which would bring a major shakeup to the retail and funeral giant in its bid to move on from a crushing cyber attack.
The deal would see the group snap up around 300 food stores, funeral branches and Starbucks coffee shops.
The Co-op Group operates a string of supermarkets and funeral branches across the country but last month it revealed a £126m loss in the fallout of a cyber attack.
The grocery chain is embarking on a £200m cost-cutting agenda and has not ruled out job losses, as it battles to move on from the incident.
Co-op said the £107m loss in profitability caused by the cyber attack came on top of a £86m cost to margins and £21m further incremental costs.
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Chief executive Shirine Khoury-Haq announced her surprise resignation last month, following the £300m fallout of a cyberattack and allegations of a toxic work culture.
Interim boss Katie Allum said the merger with the Southern Co-op would create “new opportunities” for the members of both groups.
Southern Co-op is based in Portsmouth and operates under the Co-op Food and Welcome brands, having been founded in 1873.
Read more Co-op takes £126m knock from cyber attack as boss quits
The takeover would need to be approved by the Southern Co-op’s 300,000 members, who would be absorbed by the Co-op if the deal was greenlit.
Co-op would also take on the Southern Co-op’s three crematoria, marking its re-entry into this growing market.
Merger would ‘advance co-operative cause’
Ben Stimson, the chief executive of the Southern Co-op, said the deal would secure the future of the Portsmouth-based brand, which has struggled with falling profits.
He said: “The Co-operative Group shares our values and our commitment to democratic membership, ethical sourcing and fair reward, as well as our dedication to supporting local communities.
“By coming together, we can secure the co-operative future of Southern Co-op as part of a stronger combined Co-op Group, whilst creating an even stronger voice nationally and internationally to advance the co-operative cause.”
Allum said: “Joining forces across Co-op Group and Southern Co-op will create new opportunities for members to have access to a greater range of benefits across a wider society, with more trading opportunities, and in turn more benefits for them and their communities.”
The value of the merger has not been disclosed, and the deal is expected to go ahead at the end of this year, pending the member vote.
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