Supermarkets often get a bad press (with good reason) from suppliers lamenting draconian payment terms which have been known to put small companies out of business, but Morrisons is bucking the trend by paying its small suppliers immediately to help keep them afloat during this period of economic uncertainty.
For the smallest suppliers, with an annual turnover of £100,000 or less, the normal Morrisons payment period is 14 days. For firms with a turnover between £100,000 and £1m, that period is from 30 to 60 days.
All firms with a turnover of up to £1m will now be paid immediately. For larger firms, the payment period will remain at 60 days.
The measure, which was implement in the second week in March, is designed to help suppliers get through any difficulties caused by the spread of coronavirus and the current UK lockdown. Morrisons was the first major UK supermarket to make this kind of change to its payment terms.
Thousands of products are supplied by small firms to Morrisons and paying them immediately will help them weather any difficulties they face through disruptions to their manufacturing processes, or if any of their staff go sick.
“We’re aiming to help them through the next weeks and months,” said a Morrisons spokesperson. “We want to help local producers, farmers, and fishermen during an uncertain time.”