The merger would form a group with a turnover of �500m

West Midlands Co-op and Oxford, Swindon and Gloucester Co-op are to ballot their members on the merger.

The resulting union would form a group with more than 350 stores and a turnover of �500m.

Although job losses could not be ruled out, a spokesman said any impact would be minor and the merger was expected to create more jobs in the longer term.

Stronger organisation

The co-ops are owned by customers and employees who have chosen to become members by investing a minimum of �1.

The Oxford, Swindon and Gloucester Co-op has more than 200 outlets in Oxfordshire, Gloucestershire, Wiltshire and other surrounding counties, employing more than 4,000 staff.

The West Midlands Co-op, based in Walsall, has 150 outlets from Shropshire to Worcestershire and employs more than 2,200 people.

Vivian Woodell, president of Oxford, Swindon and Gloucester Co-op, said: "We are convinced that the combined society will be more profitable and stronger than if we remain apart."

The proposed merger will have to be approved by members at meetings to be held in July and August.