30 October 2008 | Jake Kanter
Tesco has written to its non-food suppliers warning them it wants to double its payment terms.
According to the letter, seen by the Financial Times, the retailer wants to increase billing times from 30 days to 60 days. Tesco explained the action aims to improve consistency in payment terms across the group.
A spokeswoman for the supermarket told supplymanagement.com: "We have written to suppliers to seek their agreement to the change and hope to implement it before the end of the year."
"This is a move to align payment terms for our larger non-food suppliers across the Tesco group, which currently vary from country to country and within product categories."
Earlier this month, the government's rural affairs secretary Hilary Benn called on major supermarkets to speed up payments to suppliers. After a meeting with the firms, he said small suppliers depend on prompt payment to survive (Web news, 16 October).