The up market retailer pledged to pay small-scale suppliers – whose business with the retailer is worth less than £100,000 a year –within seven days.
The step, which will be phased in over the next two months, followed an internal review of payment terms for smaller suppliers.
The new deal meant the supermarket offered industry-leading terms, it claimed.
Payments to the suppliers would be made within seven days of receipt of a valid electronic invoice, according to Waitrose. More than 600 UK food producers were said to benefit from the change.
‘Good relationships with small suppliers’
Waitrose commercial director Mark Williamson 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.”
The pledge followed a five point plan last month to tackle Groceries Code related problems – including delays in payments – revealed by Groceries Code boss Christine Tacon last month.
Delays in payments
Those points were charges for artwork and design services, delay in payments, margin maintenance, pay to stay arrangements and payments for better positioning.
Meanwhile, figures released earlier this year by LDF, the finance provider, showed borrowing of small and medium-sized enterprise (SME) food producers was up by 30% on the £1.32bn borrowed in 2010 and up 70% on the £1.01bn borrowed in 2006. SMEs are defined as companies with turnover of £25M or less.
The financial supplier said despite implementation of the EU Late Payment Directive in 2011 and plans by the UK government to appoint a small business commissioner to deal with the problems, late and delayed payments were still posing a challenge for smaller food producers.