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Blow to suppliers as Tesco doubles payment terms
UK retail giant Tesco has asked its non-food suppliers to accept a doubling of payment terms in a bid to free up money over the Christmas period.
Tesco sent a letter to all of its non-food suppliers earlier this month informing them that it intended to change its payment terms from 30 to 60 days from December 1.
The letter, which has been seen by the Financial Times, said that the extension was the result of a “detailed review of our non-supplier (sic) terms, with the aim of improving consistency, transparency and efficiency across our non-food supply chain.”
A Tesco spokesman said: “This is a move to align payment terms for our larger non-food suppliers across the Tesco group which currently vary from country to country and within product categories.
“We have written to suppliers to seek their agreement to the change and hope to implement it before the end of the year.”
At present, non-food sales make up a fifth of Tesco’s overall sales.
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