Southern Co-op says three years of financial losses means it is on the brink of administration
A leading UK supermarket has warned it could collapse into administration, leaving thousands of jobs at risk.
Southern Co-op says three years of financial losses means it is on the brink of insolvency. The regional giant operates more than 300 supermarkets, funeral homes, and coffee branches across the south of England – with all at risk of closing unless it merges with the national Co-op Group.
The company’s chair and chief executive have written to members advising that the proposed merger is its best option for survival. Janet Paraskeva and Ben Stimson wrote the letter to clarify the society’s position after “a lot of speculation about the proposed merger” surfaced online.
“Southern Co-op has made losses for the past three years,” the statement reads. “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.”
They warned that if members do not vote in support of joining the Co-op Group, the business will “most likely” be forced into administration, which would “put jobs at risk, lead to the loss of stores and negatively impact our suppliers”.
“We know many members are asking whether there is another option.” the letter said. “We have asked the same question ourselves, repeatedly, over recent months.
“The honest answer is that there is no solvent alternative available to us now which we could deliver in the time frame and without exposing the business to a much greater risk, and it’s important that we are clear about what this means.”
The news comes after a “malicious cyberattack” which hit the Co-op Group last year also left the firm struggling, bosses said.
They said the company is facing operating losses of more than £20million in the next financial year, and that despite freezing recruitment and cutting office space, not enough funds have been saved to keep the firm afloat.
