Morrisons agrees to pay suppliers immediately to ensure businesses do not collapse
Morrisons has become the first major UK supermarket to agree to pay small suppliers immediately to ensure businesses do not collapse due to coronavirus.
Bosses at the grocer have also broadened their definition of what constitutes a small supplier to ensure more firms benefit.
The term will apply to firms with an annual turnover of up to £1million. Its usual definition of a ‘small supplier’ is one earning £100,000 a year or less.
Morrisons has become the first major UK supermarket to agree to pay small suppliers immediately to ensure businesses do not collapse due to coronavirus
The rules will be reviewed at the end of May. Until then ‘small’ suppliers will receive instant payment – subject to bank clearing times – instead of the current 14-day period.
Increasing the threshold will mean an extra 1,000 small food businesses will qualify for the payment terms, the supermarket added.
Chief executive David Potts said: ‘We are Britain’s biggest single food-maker and we want to be there for the smaller food-makers, farmers and businesses that supply Morrisons.
‘We’re a British family business and we will be doing our best to support them through this period.’
The move will put pressure on rivals to follow suit. Tesco, Sainsbury’s, Asda, Lidl, Aldi and Iceland were contacted for comment.