Asda reduces payment days for smaller suppliers

Asda is planning to reduce payment terms to 14 days for over 1,000 of their smaller suppliers, with the objective of improving relationships with its supply base. Earlier this year, it was reported that suppliers would have to wait 90 rather than the 60 days for payments.

Following in the footsteps of their larger competitors, Asda is attempting to increase support for its supply base and establish an effective working relationship. This move will help 1,200 small suppliers 430 of which have moved to the new contract from 1st June.

It's also understood that the retailer has already implemented simplified terms and conditions for its supply chain, offering earlier payment finance options.

The UK's fourth largest supermarket suffered 11 consecutive quarters of sales decline for until the 12 week period to 21st May 2017, when sales increased by 0.9%. Asda hope that this change will help them boost their turnaround efforts.

An Asda spokeswoman said “Our relationship with our suppliers is vital to ensuring we can do the best job for our customers and we continue to focus on building strong partnerships with them, many of whom have been with us for decades. We’re always looking at ways we can work more effectively together and we believe it is the right thing to do to reduce our payment terms to fourteen days for our smaller suppliers.”

Source: Insight Team

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