Morrisons cuts time to pay small suppliers to 14 days

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

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

Related News

Morrisons is in 'much better shape' than it has been for some time, analysts said

Morrisons is in ‘much better shape’: analyst

Morrisons reported a 3.4% rise in group like-for-like sales

Morrisons thanks food makers after sales rise

Premier Foods agreed a new deal with Mondelēz International for the Cadbury brand

Premier Foods in new Cadbury deal with Mondelēz

Premier Foods‘s underlying profit dropped 9.3% in the 52 weeks to April 1

Premier focuses on cost efficiency as profit falls

Average manufacturing pay settlements has risen above 2% for the first time since November 2015

Manufacturing pay rises to 18-month high

Asda pledged to pay its small suppliers within 14 days (Flickr/Eddie)

Asda cuts small supplier payment terms to 14 days

Morrisons has acquired Farmcare’s potato packing site in Scotland

Morrisons acquires potato packaging plant

More than 500 UK suppliers have entered Morrisons’ search for the best British food

More than 500 suppliers apply to Morrisons

Tributes have been paid to the late Sir Ken Morrison

Tributes paid to Sir Ken Morrison who has died

Morrisons and Co-op feature in this gallery of food and drink recalls

Morrisons leads product recalls – in pictures

Morrisons profit increased 11.6% in the 12 months to January 29

Morrisons’ profit would make Sir Ken ‘very happy’

Morrisons' boss praises food makers after the retailer reports its best sales performance for seven years

Morrisons’ food makers praised as festive sales rise

Mash Direct’s distribution deal with Morrisons could create £3M of revenue over the next three years. L–R: Tracy Hamilton, Jack Hamilton, Lance Hamilton, Martin Hamilton

Mash Direct secures £1M Morrisons distribution deal

Related Products

See more related products

Submit a comment

Your comment has been saved

Post a comment

Please note that any information that you supply is protected by our Privacy and Cookie Policy. Access to all documents and request for further information are available to all users at no costs, In order to provide you with this free service, William Reed Business Media SAS does share your information with companies that have content on this site. When you access a document or request further information from this site, your information maybe shared with the owners of that document or information.