Our Future Plans

Q1. Why has Midcounties Co-op decided to explore this merger now?

Midcounties and Central Co-op have a long history of co-operation and our Boards and Exec teams have been in discussion for several months about how we can benefit our members and colleagues through even closer ties. As a result, discussions about merging our societies are now at an advanced stage. While discussions are ongoing, we believe that bringing our two societies together in this way could create a stronger and more resilient Society; able to navigate challenging economic headwinds and invest for the future, while providing greater value to our members and communities, and offer more rewarding careers and greater opportunities for development for our colleagues.

Although our respective Boards have not yet made a decision on whether to propose a merger, we are making this announcement now to be fully transparent with our members and make you aware that these discussions have been taking place. We believe that this potential merger presents a unique opportunity to strengthen both of our societies and support co-operation across the UK and internationally, but we also recognise that this would be a significant change and want to ensure that our members are fully consulted before we ask you to make any decisions on the future of your Society.

Q2. Why has Midcounties Co-op decided to explore merger opportunities with Central Co-op, rather than other Independent Societies?

Central is a great partner for us – we’re both very similar sizes, we’re neighbours, and most importantly, we share the same values and have the same vision for the way a co-operative business should operate.   We also have a strong history of collaboration over recent years. Midcounties acquired Central’s travel business in 2019, and Central acquired our funeral business in 2021, and we've continued to deliver services for both sets of members into those businesses. 

Q3. What impact would a merger have on funding for the Midcounties Co-op pension scheme?

In short, very little.  Midcounties has significantly reduced its pension deficit over the last number of years through contributions into the scheme made by the Society and through investment returns in the scheme.  (The increase in interest rates since 2022 has also helped reduce the deficit given the way the calculations work).  The Society has just agreed a formal valuation with the scheme trustees.  This sees the deficit clearing in the next couple of years, a very welcome position.  The Society (and the new merged Society going forwards) will be obliged to make further contributions into the scheme, but in total, these are much less than the £7m p.a. the Society has been putting into the scheme for the last number of years.

Q4. Will the merger need approval from the competition authorities?

Yes, the Competition and Markets Authority (CMA) must approve the merger for the food business to make sure that the new Society will not have an undue competitive advantage in locations where both societies now have stores located close to each other. Professional advisors have conducted an analysis and found minimal store ‘overlap’. So while the CMA will make the final decision, the expectation is that few, if any, stores will need to be sold.

Q5. If the merger was successful, would the enlarged Society still be committed to supporting the co-op movement in the UK and internationally?

Absolutely.  Both Societies have agreed that this support should be maintained.  Both Boards believe the merged Society will be able to have greater impact within the co-operative movement both nationally and internationally, something they welcome.  So the societies are committed to supporting co-operative organisations such as Co-operatives UK, the Co-op College, Co-op Press, the Co-op Party and international bodies like the ICA and Euro Co-op.

Q6. What would be the impact on colleagues in terms of redundancy if the merger was approved?

The majority of roles, particularly in frontline services like food stores, nurseries, and travel agencies, are expected to remain unaffected. However, there will be duplication of certain roles, particularly in the Head Office – the new Society won’t need two Chief Executives for example, nor two Chief Financial Officers.  So some central roles will be consolidated, and there will, inevitably, be some redundancies.  We will work closely with those colleagues so affected in a considered way, as it’s important we treat colleagues fairly given the merger and that's the way we do things as a co-operative business. Right for now though it's very much business as usual for everyone.

Should the merger proposals move forward and then be approved by members, there would be a very considered process of integration as we become one new Society, and our colleagues would be kept fully informed throughout.

In the meantime, we want to make sure that every colleague can ask questions you might have and we will be holding regular briefings and answering any questions they may have throughout this process.

Q7. What is the expected timeline for completing the merger?

We will need to hold two formal member meetings, and are planning some member consultation events beforehand. These will all take place in November and early December. Legal completion is anticipated in early 2026, subject to regulatory approvals.

Q8. What does Central Co-op do well which could be further developed in an enlarged Society if the merger was successful?

Central Co-op is recognised for its strong funeral business, effective procurement, and great member engagement practices. Midcounties brings strengths in communications and has tended to have a more innovative approach – witness the development of the early years education and travel services. The merger offers opportunities for both societies to learn from each other and to enhance their collective capabilities.

Q9. Will Members have the same opportunity to engage, including investing in the new Society?

Yes, the intention is to retain and build upon Midcounties’ successful member investment schemes and co-operative practices. The merged society aims to encourage Central members to engage similarly, fostering a vibrant, democratically active membership base.

Q10. If the merger was approved, where would the new Society’s head office be located?

No decision has been made regarding a single head office. Both societies own their head office buildings (Warwick and Lichfield) which provides flexibility.  Certainly, the merger presents an opportunity to rethink how workspaces are used, especially in a post-pandemic world.

Q11. What would be the process for choosing the new name of the Society?

A new name will be proposed to members that reflects the heritage and future ambitions of the merged society and aligns with co-operative identity and values. It will not include ‘Central’ or ‘Midcounties’ to distinguish the new Society from the past.  This is something that needs to be actioned in good time so will be high on the new Board’s agenda.

Q12. How will the new co-operative ensure that its combined businesses complement each other and deliver greater impact?

Our working assumption is that the businesses operated by both societies will continue in place for the foreseeable future to meet our members needs and expectations.  So, all the businesses are included in the five-year plan for the new Society that has been drawn up. Over time, the new board will assess the strategic fit of each business area, considering member needs and societal changes. Innovation and adaptability will be key to ensuring the merged society’s offer remains relevant and impactful.

Q13. What does the future of Midcounties look like if the merger doesn't go ahead?

If members do not approve the merger, Midcounties will continue operating independently with a clear strategic plan. This includes improving efficiency, reducing debt, and investing in areas like pensions and member services. However, the Board believes the merger offers the best long-term future for members and colleagues given the opportunities it presents to develop the business and the headwinds impacting the Society.

Q14. What are the likely savings and cost efficiencies which could be realised as a result of the merger?

In conjunction with Central Co-op, we have developed a five-year business plan that includes significant investment in the first one to two years to integrate systems and teams. A major focus is on IT, where both societies currently use some of the same systems but pay duplicate licensing fees. By consolidating and choosing the most effective systems, we can reduce costs and improve efficiency really very significantly.

The initial investment is expected to be around £8 million, mainly to support integration. However, once completed, the merger is projected to deliver annual savings of approximately £17 million through better buying power, streamlined contracts, and reduced duplication in systems and infrastructure.