Shopko and Pamida, both owned by an affiliate of Sun Capital Partners, are to merge. The retailers expect the deal to close in mid-February, and financial details have not been disclosed. With Shopko and Pamida’s annual revenues of $2bn (£1.29bn) and $1bn (£647.4m) respectively, the companies will operate nearly 350 stores in 22 states, headquartered in Green Bay, Wisconsin.

The company will use the Shopko name, with no change to Shopko stores, and will spend about $80m (£51.8m) in the next year to convert most of the Pamida stores to the Shopko Hometown concept. Shopko president, chairman and chief executive W Paul Jones will head the new company.