Sainsbury’s Tells Suppliers They Can Wait to Be Paid

Sainsbury’s has entered the Forum of Private Business (FPB) "hall of shame" for slow payers. Extending payment times from 30 to 75 days for non-food suppliers has more than doubled the wait for some. Effective Dec. 6, the new policy has allegedly left some small businesses worried about cash flow and even survival as well as feeling pressured to accept changes to previously agreed terms.

Other occupants of the Hall include Dell, Argos and Carlsberg, who have apparently also increased supplier payment times retrospectively.

The FPB, a lobbyist for small business, was particularly loud in its criticism, stressing that Sainsbury’s has loudly proclaimed its ethical principles. Changing payment terms midway through some suppliers’ contracts was seen as particularly cynical.

For its part, the supermarket chain claims to be simply bringing its terms in line with "industry standards," according to a letter to suppliers which The Daily Telegraph reported seeing. The Daily Mail adds that spokesperson Alex Cole cited Tesco’s 90-day policy.

FPB spokesman Phil McCabe is quoted in the Telegraph saying, "In moving from 30 to 75 days, Sainsbury’s is imposing a massive 150 percent increase in the time it takes to pay. … There has been no real consultation — a letter to suppliers telling them it is happening does not count, and the excuse that this is in line with ‘industry standards’ is just laughable. That is why we are naming and shaming Sainsbury’s in our late payment hall of shame."

The Telegraph added the FPB’s claim that Sainsbury’s was one of just four FTSE 100 companies that recently refused to sign a government recommended voluntary agreement to promote good payment practices, the Prompt Payment Code (PPC). The FPB has now written requesting that Sainsbury’s reconsider.

• Sainsbury’s enters the Forum’s Hall of Shame after extending payment times by 150% – Forum of Private Business
• Supermarket giant Sainsbury’s makes suppliers wait for crucial payments – Daily Mail
• Sainsbury’s in hall of shame over supplier payments – Daily Telegraph
• Sainsbury’s criticised over increased payment times for suppliers – The Retail Bulletin
• Sainsbury’s reassures packaging suppliers over payment times extension – Packaging News
• FPB blasts "arrogant" Sainsbury’s over increased payment times – The Grocer