The extension of prompt payments will benefit suppliers that contribute up to £1m of turnover for the retailer, including suppliers of local food and farmers that deal direct with Morrisons – such as those providing eggs and livestock.
This has been particularly helpful for smaller firms that have lost a lot of business due to the widespread closer closure of the foodservice and hospitality sectors in the wake of COVID-19. Morrisons has around 3,000 small suppliers, which it expected would benefit from the scheme.
‘Feeding the nation’
Morrisons chief executive David Potts said: “Small foodmakers and farmers have helped us to play our full part in feeding the nation. They have told us they face continued financial pressure and we want to be there for them during this challenging period.”
Federation of Small Businesses national chairman Mike Cherry said that Morrisons’ decision to extend their period of prompt payment was a refreshing change of pace to the norm being experienced by smaller producers at the moment.
“Many small suppliers have seen their payment terms lengthened or cashflow held up as their big clients try to insulate themselves from the impacts of COVID-19,” said Cherry.
Getting business back on their feet
“This [Morrisons’ payment scheme] is what good business looks like in these unprecedented times, and we need to see more positive action like this as the whole business community looks to get back on its feet.”
Morrisons has taken a number of steps to support the food and the drink industry during the global pandemic.
The retailer announced it would spend £10m to ramp up food production and send deliveries of ambient food to help restock the nation’s food banks during the Coronavirus outbreak. It also dramatically increased production and delivery of food boxes for next-day delivery aimed at vulnerable and self-isolating people from four production facilities, with the aim of building capacity to more than 200,000.
Meanwhile, milk suppliers left struggling in the wake of the worldwide coronavirus pandemic could soon benefit from £10k of funding from the UK Government to help sustain their businesses.