Tesco has announced that it is extending its improved payment terms for smaller suppliers in the UK and Ireland until 31 January 2021.
The extension means over 2,000 UK suppliers and 200 in Ireland will continue to have their invoices paid immediately, instead of the usual 14 days.
The retailer introduced the scheme back in March alongside similar moves by Sainsbury’s, Morrisons, and Aldi to help with company’s cashflow.
Tesco noted that smaller suppliers have been amongst the hardest hit in the food industry during the pandemic. It stated that the extension of improved payment terms would mean small businesses will continue to be supported throughout the busy Christmas period and beyond.
Chief Product Officer, Andrew Yaxley said: “With uncertainty in the food sector continuing, it’s vital we do all we can to support the small suppliers we partner with.”
Aldi and Morrisons have also pledged to continue paying smaller suppliers immediately until the end of the year. However, Sainsbury’s recently ended its scheme and moved to 14-day payment terms. However, this was better than the previous payment terms of up to 45 days.
NAM Implications:
- Apart from bonding closer with smaller, committed suppliers…
- …an enormous PR advantage (at relatively little cost) for the mults and discounters to pay faster.
- …especially given the accumulation of profit arising from relatively promotion-free sales at normal prices during national lockdown.
