UK supermarket group Asda has announced it is reducing its payment terms to small suppliers to 14 days, ‘as part of its on-going efforts to work more effectively with its supply base’.
The Walmart-owned retailer said that the move will benefit suppliers with up to £250,000 worth of business with Asda. In total, around 1,200 suppliers are set to benefit from the move, with the first 430 suppliers having transferred to the new terms on 1 June.
Relationship
“Our relationship with our suppliers is vital to ensuring we can do the best job for our customers and we continue to focus on building strong partnerships with them, many of whom have been with us for decades,” said an Asda spokesperson.
“We’re always looking at ways we can work more effectively together and we believe it is the right thing to do to reduce our payment terms to fourteen days for our smaller suppliers.”
Terms & Conditions
As well as the new terms, Asda has also simplified its Terms and Conditions, as well as providing access to early payment finance options and operating a ‘Sustain and Save’ programme that helps small suppliers shed operating costs.
Commenting on the retailer’s announcement, Philip King, chief executive of the Chartered Institute of Credit Management, said, "Treating suppliers fairly by accelerating payments, simplifying terms and conditions, and offering supply chain finance are important tools for maintaining a strong customer/supplier relationship.
"Certainty of payment, and professional credit management, help businesses of all sizes to better plan for the future."
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
