Waitrose supermarket has pledged to pay its smaller suppliers within seven days at the most, in a bid to give them “more financial stability”.
In good news for small bakery operations, the new payment terms will come into effect over the next two months and mean that all suppliers with an annual turnover of less than £100k will receive payment within a week of providing an electronic invoice.
Waitrose said that more than 600 small suppliers are set to benefit, as it supplies over 2,500 locally and regionally sourced products.
Mark Williamson, Waitrose commercial director, said the review of its payment terms aimed to “make our good relationships with small suppliers even better.
“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 cashflow.”
Roberto Lobue, head of retail at accountancy firm Menzies, said: “In this time of economic uncertainty, large businesses have a social responsibility to treat their smaller counterparts fairly and it’s great to see Waitrose take the lead on this.
“Waitrose is likely to enjoy the commercial benefits of taking an ethical stance towards small businesses by appealing to the UK’s increasingly ethically minded consumer base. Furthermore, staff retention is likely to improve as employees value working for a socially aware organisation.”
Lobue said that other supermarkets would do well to follow suit, and added that Waitrose should extend the contracts to larger suppliers too.
Last week, Waitrose announced that suppliers of its own-label biscuits and cakes could benefit from a new deal with international online retailer British Corner Shop.