Revealed: The best and worst national retailers for paying small suppliers
British supermarket giant Tesco has the worst record for paying small suppliers amongst the country’s best-known retailers, new market data from fintech startup Ormsby Street has shown.
Comparing the credit rating and payment performance of 20 of the biggest names in UK retail, Orsmby Street uncovered the country’s best and worst companies for paying small suppliers.
As the worst performer, Tesco was found to take on average 105 days beyond its standard terms and conditions when paying small suppliers.
Supermarket chain Iceland and department store Debenhams are the second and third most negligent paying retailers on the list of 20, taking 75 days and 73 days on average paying small suppliers.
The data showed that, taken together, the 20 retailers included in the Ormsby Street list took on average 45 days longer than standard terms when paying small suppliers.
The fintech startup’s managing director, Martin Campbell, said that the new statistics would be especially worrying to small business owners as holiday season approaches.
because Christmas is such a major part of the shopping calendar, any orders may be much larger than at other times of the year, said Campbell.
a small business could be waiting for even more money during the festive period. If they have to take on extra staff or resources to meet the order to a major retailer, this could be a difficult and damaging time for cash flow.
The five worst and five best UK retailers in terms of paying small suppliers are identified below. The worst are:
Asda Group/ Morrisons
And, although still paying small suppliers many days beyond terms on average, the five best UK retailers are:
Fortnum & Mason
House of Fraser
The best of the bunch, luxury department store Fortnum & Mason, took five days beyond its terms on average when paying small suppliers. Lidl was found to take nine days extra to pay up, whereas House of Fraser and John Lewis took on average 15 days and 18 days after terms respectively.
The amount of money overdue to small suppliers could be could be very significant, potentially having a huge impact on business operations. Previous Orsmby Street research concluded the value of the average overdue invoice to small suppliers was 6, 142.
Campbell advised small suppliers to agree strict terms with larger retailers up front. Retailers are all aware that for a small business it’s a big deal to get products in front of a national audience, and so they usually hold the trump card, he said.
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.
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