The Midlands Co-operative Society and Anglia Co-operative Society have revealed plans to merge to create a new retail co-op with a projected £1bn of sales.

The businesses, which are two of the UK’s largest co-operatives and trade under The Co-operative fascia, will propose the merger to their members who will vote over the next two months.

The combined business will employ 8,600 staff, consist of 227 food stores, 112 funeral home and 21 travel shops as well as three opticians and a salon.

Midlands Co-op chief executive Martyn Cheatle said: “In a highly competitive marketplace, the time is right for us to join forces. Both societies are strong within their respective areas and combined would create one of the most successful co-operative societies in the country.

“By pooling our resources, we will be better placed to develop our competitive advantage, protect our existing business, and move forward with investment and expansion on a greater scale.”

Anglia Co-operative Society chief executive John Chillcott said: “As well as having huge similarities from a business and organisational point of view, our two Societies also have the benefit of a shared cultural and ethical perspective.

“Having already spent many years working together in co-operation to the benefit of both Societies, I have no doubt that this partnership will be a huge success financially and will bring many benefits to the communities which we have both served for so long.”

If members of both societies approve the proposal for the merger, the legal formation of the merged society is planned for early December.