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The late payment scandal sweeping all major supermarkets PDF Print E-mail
Monday, 01 February 2016

New analysis conducted by Creditsafe, the world’s most used provider of online company credit reports, reveals all the major UK supermarket chains are guilty of routinely paying supplier invoices late1.  Waitrose pays suppliers on average 36 days beyond the agreed payment terms set out in a supplier contract, whilst ASDA pays invoices on average 31 days beyond terms.  Tesco, which attracted a storm of criticism recently when its payment record was exposed currently still pays suppliers late, but compares favourably to other retailers in the sector. 


Interestingly the so called value supermarkets Aldi and Lidl fare better than some of their larger competitors. Aldi pays its supplier bills on average 15 days late with Lidl transferring funds owed 11 days past due date compared to WM Morrison which averages 18 days late. When looking at late payments, Sainsburys performs better than sector competitors satisfying invoices on average 7 days beyond agreement terms.

The analysis also reveals the big supermarket chains are racking up a number of County Court Judgments (CCJs). ASDA has 75 CCJs registered against it while Tesco has 74, this compares to just 5 for Aldi and 6 for Lidl. The average value of the CCJs is relatively low given that these retailers turn over billions of pounds a year. The average value of each CCJ against Tesco was £5,948 while for ASDA it was £2,473. This could indicate it is with the smaller suppliers that the retailers are failing to pay and who have been forced to take these retail juggernauts to court to force payment.

Rachel Mainwaring, Operations Director, Creditsafe UK said: “This analysis reinforces the poor payment practices endemic in British business culture. Firms routinely pay invoices late to assist with their own cash management without considering the potentially devastating knock on effect this can have in the supply chain. Just because a large corporation has billion pound revenues doesn’t mean they will pay their bills on time.”

“Companies concerned about how their own business could be impacted if they trade with a habitual late payer can check the payment practices of other firms utilising credit referencing services. Firms can establish the likelihood of a trading partner becoming insolvent, dramatically reducing their risk and also check the likelihood of invoices being paid on time.”
 
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