The boards of Scotmid Co-operative and Seaton Valley Co-operative are in discussions over merging the two Societies later this year.
Executive teams from both Societies will work together to draw up a timetable and plans for a potential merger.
Scotmid merged with Penrith Co-operative in 2013, taking over its nine retail outlets and post offices across Cumbria and County Durham and rebranding it Lakes & Dales Co-operative.
Seaton Valley Co-operative employs around 100 staff in five retail outlets and a Post Office in the south east of Northumberland.
Sctomid’s Stockbridge store in Edinburgh was recently named convenience retailer of the year at the 2015 Convenience Retail Awards.