UK's largest Co-ops in merger talks

The UK's two largest co-operatives have begun talks that could lead to a possible merger.

A combination of the Co-op Group and United Co-operatives, if successful, would have a combined equity worth about£10 billion, making it the biggest co-operative society in the world.

The merger would create a group with more than 4,000 outlets, offering services from funerals to shoe repairs.

The UK's retail market has become far more competitive, with supermarkets constantly slashing prices. The merger would improve the Co-ops' ability to compete with the UK's biggest retailers.

The groups said in a statement: 'The boards of the Co-operative Group and United Co-operatives have agreed to discuss the possibility of a merger between their two societies.

'Talks have commenced and a further statement from the two boards will be issued when they conclude.'

The Co-operative Group is the UK's largest, with an annual turnover of£8 billion and United Co-operatives earns£2.5 billion a year.

Co-operative retailers had a 20 per cent share of the UK grocery market in the 1950s, but this has reduced to 6 per cent as supermarkets' grocery share has increased.

The Co-operative Group has 3.5 million members and United Co-operatives has 930,000.