Morrisons has committed to pay its small suppliers immediately to help them deal with the impact of coronavirus.
The faster payments are designed to support the retailer’s 3,000 small suppliers and farmers to support their cash flow.
Morrisons is also temporarily re-classifying a “small supplier” from those with up to £100,000 of business-a-year with the retailer, to those with up to £1m of business.
Normal payment terms for Morrisons’ smallest suppliers are 14 days, while firms with a turnover between £100,000 and £1m are usually paid within 30-60 days.
The temporary payment terms will begin next week and are expected to last until the end of May, before being reviewed.
David Potts, chief executive of Morrisons, said: “We are Britain’s biggest single foodmaker and we want to be there for the smaller foodmakers, farmers and businesses that supply Morrisons. We’re a British family business and we will be doing our best to support them through this challenging period.”
Environment secretary George Eustice said: “These measures will support our farmers and food producers in their vital work of feeding the nation.
“We already have a highly-resilient food supply chain in this country and I am continuing to work closely with Morrisons and other retailers on their response to coronavirus.”
Meanwhile, the retailer also announced it would be sharing more operational data with suppliers as part of as part of a string of measures aimed at helping make suppliers react better to market conditions.
The retailer is set to share more sales, forecasting, waste, stock and range information through its Morrisons Supplier Database. It also plans to allow suppliers to see data obtained through its customer loyalty card, More Card.
It also plans to enhance the Morrisons Supplier Database so that suppliers can quickly view and interact with sales and supply chain performance data.
The retailer said this would allow it and its suppliers to take action to increase availability, reduce waste, improve promotional performance and ensure timely supply of appropriate products.
The service will be free for the company’s suppliers and is due to launch later this month following a successful pilot.
Morrisons also plans to change its internal structures, bringing supply chain and buying teams together in a single business unit, with shared targets and planning.
Andy Atkinson, group commercial director, said: “We have big plans for the year and we aim to grow profitably with our suppliers.
“We’ve said we want to be simpler to work with – and all of these improvements will help buyers to spend more time with suppliers to work on long-term initiatives to unlock mutual growth.”
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