Waitrose has announced that it will reduce its payment terms for all small food producers to a maximum of just seven days.
The retailer said the step, which will be phased in over the next two months, follows an internal review of payment terms for smaller suppliers and will mean that the supermarket now offers industry leading terms.
Waitrose has pledged to pay all its small scale suppliers, whose business with the retailer is worth less than £100,000 annually, within seven days of receipt of a valid electronic invoice. It said that more than 600 UK food producers will benefit from the change.
Mark Williamson, Waitrose Commercial Director, commented: “The internal review of how we pay our smallest suppliers was initiated because we wanted to make our good relationships with small suppliers even better by simplifying the payment process.
“We are passionate about supporting and nurturing British producers – and this step will help give smaller scale businesses, including new start-ups, more financial stability by helping with cash flow.”
Waitrose has a dedicated buying team for local and regional suppliers and sells over 2,500 locally and regionally sourced products from 600 suppliers, with plans for further growth.
- Taking typical order-delivery cycles into account, then 7 days should be taken as a norm for all retailers
- This would mean that trade credit would cover the cash-gap between delivery and cash-sale…
- Instead of being treated as a source of working capital/margin enhancement by retailers…