The third largest supermarket operator in the UK has extended its payment terms to most of its non-food suppliers by up to 150 per cent.
Sainsbury’s has confirmed that the only suppliers not to face longer invoice payment periods will be those in the construction sector.
The chain, which has more than 1,000 stores across the UK, with an ever-growing presence in Scotland, is to increase its terms from 30 to 75 days. The news has been met with criticism from the Forum of Private Business.
Following the news, the forum has added the chain to its Hall of Shame. It has also been urged to sign up to the government’s Prompt Payment Scheme, with its policy adviser, Robert Downes, saying:
“[for] the sake of small businesses and the economy, the government must prioritise tackling the culture of poor payment.”
Delays in the payment of invoices are an increasing trend, and are thought by many to be preventing numerous businesses in Scotland, and throughout the nation, from moving forward.
However, through the use of invoice discounting and factoring, many businesses are coping and in some cases, even growing. Their success is thought to be key in helping the UK exit recession recently. The move by Sainsbury’s, which announced a 4.3 per cent increase in sales volumes earlier this month, is expected to bring it in line with the rest of the industry.
A spokesman for the chain also said that help would be given to any suppliers that struggle to cope with the change.