United Co-operatives and Sheffield Co-operative Society are in merger talks that could see the two businesses joining forces by early next year.

Executives from the two societies will present the proposed deal to Sheffield members at a meeting on

2 October.

This will be followed by a second, confirmatory, meeting on 17 October. If members approve the proposal, then it will take effect from late January.

Sheffield Co-operative Society chief executive Michael Howarth said: "Being part of a larger, more diverse business would increase career opportunities for staff and with the increased profits would come the ability to support more investment."

His counterpart at Rochdale-based United Co-operatives, Peter Marks, added: "There is a very good fit between the two businesses, with both having the same trading strategies, especially in food. The proposal is an excellent opportunity to develop more effectively throughout South Yorkshire."

With 36 food stores, plus another set to open soon, Sheffield Co-operative Society has a turnover of £95m - £60m from grocery sales - and employs about 1,200 people.

United Co-operatives, which has 530 food stores, has a turnover of £2.1bn - £921m from grocery - and employs 16,000 staff.