Central England Co-op has announced plans to close three warehouses and a garage, saying workers will be offered other jobs within the business.
The society said up to 400 jobs are affected at warehouses in Leicester and a garage on the outskirts of the city in Whetstone.
The business, based in Lichfield, in the West Midlands, has more than 400 supermarkets, shops and funeral homes in central England and East Anglia.
Its distribution operation is based in Leicester, where it has three premises, including a modern chilled food and drink distribution building on the Braunstone Frith Industrial Estate.
It is understood staff in Leicester and Whetstone were told of the proposed redundancies this week.
A warehouse worker in Scudamore Road got in touch with LeicestershireLive, said: "Central England Co-op, off Scudamore Road is making the entire workforce redundant as they close all three warehouses next year to relocate."
They added that the businesses had not revealed further details.
The society has confirmed about 400 roles are affected and said roles will be offered within the business for all workers whose jobs are being made redundant.
A Co-op spokesman said that Central Co-op's distribution operation in Leicester will move to the LIDIA network, a "national collective distribution and logistics operation" which already serves more than 4,000 stores with 13 distribution centres – and is owned by the Manchester-based Co-op Group Ltd.
In a statement, he said: "Central Co-op is committed to delivering on our purpose of creating a sustainable society for all.
“Over the past year we have been working on our strategy, across all areas of our business, to build a clear growth plan to deliver on this mission.
"To continue growing the society and where we support communities, we have given a lot of careful thought to the future needs of our distribution operations – including the age of our current network and its capability to fulfil the future needs in our strategy to improve the offer to members and customers.
"We looked at a number of options, including investing in a new purpose-built modern operation. Approval has been reached for Central Co-op to join the LIDIA network from 2024.
"This national collective distribution and logistics operation, already serves over 4,000 stores with 13 distribution centres. LIDIA is owned and operated by the Co-op Group on behalf of their own stores and other independent Co-operatives’ stores in the UK.
“This is a difficult decision for some of our colleagues and we are sorry it will result in the proposed closure of our three distribution operations in Leicester and our Whetstone garage, with the transition period expected to take a year.
"We will now enter a consultation period with USDAW (the Union of Shop, Distributive and Allied Workers).
“Our priority will be supporting our colleagues, identifying ways to avoid redundancy and redeploying everyone who would like to move into alternative roles, either within Central Co-op or the LIDIA network.
"We will be able to offer alternative roles to all colleagues affected by the announcement, who would like to stay with Central Co-op, with jobs in our stores and funeral homes. There will also be opportunities in the LIDIA network."
Debbie Robinson, chief executive at Central Co-op, said the business had outgrown its current distribution facilities in Leicester.
She said: “The commitment and experience of our distribution teams is amongst the best in the logistics industry and they do an amazing job keeping our shops running.
"I know this is going to be a difficult time for some of our colleagues and our priority will be supporting them and we are able to offer them alternative roles, either within Central Co-op or the LIDIA network."
