Sainsbury’s has been accused of “startling arrogance” by the Forum of Private Business for having more than doubled all non-food supplier payment times.
The supermarket has told those affected that it will make the dramatic increase following a review which found that its standard 30-day payment times differed from industry standards. Suppliers of housewares and other non-food lines will now have to wait 75 days to be paid.
The move has prompted the FPB to enter the grocer into its so-called Hall of Shame to join other retailers, amongst them Argos, that have all previously increased supplier payment times retrospectively.
Sainsbury’s – which earlier this year announced a 7% increase in profits – has been told of the FPB’s move, and been asked to sign the government’s Prompt Payment Code, subscribers to which pledge to pay suppliers on time, and not to change terms and conditions mid-way through a contract.
“Sainsbury’s might like to promote themselves as the ethical supermarket, but when it comes to their treatment of suppliers they are anything but,” said FPB policy adviser Robert Downes.
“No right-thinking person could justify what Sainsbury’s is proposing – a 150% increase in the time it takes them to pay a supplier for goods provided – as being fair and decent.
“With startling arrogance they have then tried to justify this increase by claiming 75 days is the industry standard. This is utter fabrication.”
He went on: “This kind of borrowing from suppliers, whatever their size, is scandalous, particularly from a profitable FTSE 100 company like Sainsbury’s, who are in no way financially challenged, but clearly just greedy.”
Around £37bn is owed to small firms in unpaid invoices in the UK at any one time, with slow payment a major headache for the supply chain.
The FPB says that when suppliers receive a letter like the one Sainsbury’s sent out, few have any choice but to agree to the new payment terms. There is little room for bargaining through fear they will lose the business, it argues.