A STRUGGLING co-operative society has agreed a merger with one of the most successful independent groups in the country.

Stanhope and Weardale Co-operative Society, in County Durham, which was founded in 1865, has agreed to merge with the Penrith Co-op, in Cumbria, which last year had a turnover of nearly £9m and profits of about £120,000.

In contrast, Stanhope and Weardale had a turnover of £1.2m, but has been running at a loss for several years.

After months of talks, it has been agreed that the merger between the two societies will take place on July 13.

The joint board of directors, which will include two members from Weardale, hope for an upturn in business through a successful dividend scheme introduced in the Penrith society's six stores. Last year, a two-and-a-half per cent dividend resulted in a £114,00 pay-out to customers.

A new low-pricing structure will also be introduced at all five co-ops in Weardale.

John Tompkins, chief financial executive at Penrith, said yesterday: "This merger is good for the independent co-operative movement and particularly for the smaller societies.

"We have been sharing ideas and experience with Stanhope and Weardale for some years now. This seems to be the natural step forward."

Mr Tompkins said: "By introducing a successful dividend scheme and bringing in a low-pricing structure, which has only operated at the Stanhope store so far, to all our shops in Weardale, we are confident we can attract new customers and members."

He said there were no plans to close any outlets in Weardale or make any of the 28 staff redundant

Beverley Raper, chief executive of the Stanhope and Weardale society, said: "We regard the merger as a breath of fresh air for retail trading in the dale. By enlarging our operations, we are sure we can provide a secure base for our customers and members.

"There is an old phrase in the co-op movement that 'unity is strength'. That is our aim."