Supermarket group Sainsbury‘s has pledged to pay suppliers on time, adding its name to the government-backed Prompt Payment Code.
The PCC, which was launched by the UK Department for Business, Innovation & SKILLS (BIS), is a voluntary code that encourages retailers to pay suppliers on time and according to the terms set out in the original contract. It discourages retrospective changes to terms as well as any changes to length of payment for smaller suppliers.
“We have indeed written to [business minister] Michael Fallon to confirm we are signing up the PPC as we have received assurances that it will not cause unnecessary complexity to our business,” a spokesperson for Sainsbury’s told just-food today (5 February).
However, the spokesperson suggested that this would entail few changes to the group’s payment practices. “We already abide by the spirit of the code with our supplier finance platform, commitment to GSCOP [Grocery Supplier Code of Practice] and having a team in our finance division dedicated to ensuring suppliers are paid promptly. All of this means we are already one of the fastest payers in the FTSE 100 and at 75 days for our general merchandise suppliers we still pay faster than most of our rivals, many of which pay between 90-120 days.”
In 2007, Sainsbury’s introduced a supply chain finance scheme that enables suppliers to receive early payment in return for a “small financing cost”.