Morrisons cuts time to pay small suppliers to 14 days

By Matt Atherton

- Last updated on GMT

Morrisons is reducing the time it takes small-scale suppliers to 14 days (Flickr/Mike Brocklebank)
Morrisons is reducing the time it takes small-scale suppliers to 14 days (Flickr/Mike Brocklebank)

Related tags Payment terms Receipt Money Invoice Morrisons

Morrisons’ small-scale food and drink suppliers will have to wait only 14 days for payment, after a pledge from the UK’s fourth-largest retailer.

Any Morrisons supplier, whose business with the retailer is up to £100,000 a year, will be paid within two weeks of a valid electronic invoice, the retailer said.

Suppliers that don’t use an electronic invoicing system could use a new online supplier portal instead, which would be operational later this year.

The faster payment terms would affect more than 3,000 suppliers, the retailer claimed.

‘Help them with their cash flow’

Morrisons group commercial director Darren Blackhurst said: “We aim to buy and sell simply, and when we listened to our smaller suppliers, they told us that these payment terms would help them with their cash flow.

“We want our smallest suppliers to grow with us.”

The revised payment terms was the latest change from the retailer as it aimed to build on its ambition to buy and sell simply, it said. Morrisons had also removed or reduced added supplier charges, resolved all cost price invoice queries within five working days and introduced a simpler supply agreement, due to come into effect later this year.

Long-term business deals

Morrisons was still working on developing long-term business deals with its own-label partners and strategic suppliers, it said. It also planned to launch a whistleblowing service, so suppliers could anonymously raise concerns with the retailer.

Food producers across the UK have lined up to supply Morrisons, as the retailer confirmed more than 500 businesses have applied to work with it​. Morrisons held the first of 11 nationwide events earlier this month in its search to add more than 200 local supplier to its supply chain this year.

Meanwhile, Morrisons’ pledge followed scrutiny of supplier relation terms, operated by both large-scale manufacturers and retailers.

In December 2014, Premier Foods denied accusations it had mistreated its suppliers​, by demanding unfair payments to continue trading with it. An investigation revealed suppliers were intimidated by the food manufacturer’s demands of either investing in the business, or face de-listing.

Morrisons revised payment terms – at a glance

  • Morrisons to pay suppliers within 14 days
  • Terms affects suppliers that earn up to £100,000 annually
  • More than 3,000 suppliers affected

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