Food wholesalers are facing longer payment delays from the UK’s largest supermarkets.
New research by peer-to-peer lender MarketInvoice, found wholesaler small- and medium-sized enterprises (SMEs) were on average payment terms of 42 days with supermarkets in 2016 – five days longer than in 2015, where suppliers had average payment terms of 37 days.
Having tracked more than 1,500 invoices issued to UK supermarkets in the last year, MarketInvoice found almost two-thirds of wholesalers had their payment terms increased in 2016.
Anil Stocker, chief executive of MarketInvoice, said: “Long payment terms are just a reality of life when it comes to working with big retailers like supermarkets. But it’s a bad sign when these terms get even longer – especially considering all the incoming Government initiatives which are directly targeting poor payment practice to SMEs.
“Wholesalers are so reliant on their supermarkets debtors, so these big corporates are in a position of real power, and they are abusing that power. No-one wants to bite the hand that feeds, so suppliers are stuck in a hard place when it comes to negotiating payment terms.”
It comes after statistics released earlier this year showed 60 per cent of farms and other SMEs were paid late in 2015, with supermarkets and high street retailers seen as ‘prominent’ offenders.