According to the nursery group, the setting has been making a loss for ‘some time’, and this has been exacerbated by ‘rising operational costs’.
It said that the 65-place setting is also in need of modernisation which would come at a ‘significant’ cost.
The nursery, which is open to both hospital staff and local families, will shut on 22 September.
A spokesperson for The Midcounties Co-operative said in a statement that the nursery group has been looking for alternative premises in the area for the setting, but has been unable to find anything.
The nursery at Croydon University Hospital was formerly operated by the Buffer Bear nursery group, which was acquired by Co-operative Childcare in 2011.
Co-operative Childcare, part of the Midcounties Co-operative, now owns 49 settings across England, which trade under the Little Pioneers brand.
The nursery group has plans to double its number of nurseries over the next five years.
A spokesperson for The Midcounties Co-operative said, ‘The Midcounties Board has taken the difficult decision to close our Croydon nursery from 22nd September 2023.
‘As a Co-operative business, we regularly review our property footprint to ensure that we are best placed to continue delivering for our members whilst providing long-term support for local communities across the areas we operate in.
‘Unfortunately, the Croydon nursery has been loss making for some time, which has been exacerbated by rising operational costs, and needs significant investment to modernise the facilities.
‘We remain focused on ensuring that the children and their families who use the services of our Croydon nursery are able to access childcare at our nearest sites in Sutton and Tadworth, as well as supporting them to ensure the smoothest transition possible.’