Waitrose has announced it will be paying small food producers within seven days.
The supermarket said the move follows “an internal review of payment terms for smaller suppliers” and it meant Waitrose now offered “industry leading terms”.
Suppliers whose business with Waitrose is worth less than £100,000 a year will be paid “within seven days of receipt of a valid electronic invoice”.
The policy, to be phased in over the next two months, will affect more than 600 UK food producers.
Mark Williamson, commercial director at Waitrose, said: “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.”
Roberto Lobue, head of retail at accountancy firm Menzies, said : “Although the pledge is definitely a step in the right direction, Waitrose could go even further. Contracts worth less than £100,000 per annum are still likely to form only a limited part of Waitrose’s supply base; the threshold for swift payment should be extended to larger suppliers to achieve significant impact.
“Late payment has long been a crippling caveat of doing business with large supermarkets and this practice must end. Many small firms are unable to make accurate cash flow forecasts, and depleted working capital can eliminate the ability to purchase and process goods for future sale.”
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