Woolworths speeds small supplier payments during coronavirus crisis

Woolworths will temporarily change policy to pay small suppliers faster for their goods and services.

Payment terms for eligible small suppliers are being temporarily aligned across the entire business, including BIG W, Endeavour Group and its New Zealand business, and will not exceed 14 days.

Woolworths has shortened the payments terms for its small suppliers, shifting its position on the time it takes to pay off grocery suppliers at a time when many are struggling with cashflow because of the coronavirus pandemic.

Woolworths said in recognition of the economic uncertainty many of its small business supplier partners are facing, it would temporarily change policy to pay small suppliers faster for their goods and services.

Currently small trade suppliers in Woolworths’ Supermarkets business are paid within 14 days, while across the rest of the group, payment terms for small suppliers do not exceed 30 days from receipt of a correct invoice or receipt of goods.

But Woolworths said the payment terms for eligible small suppliers would be temporarily aligned across its entire business, including BIG W, Endeavour Group and its New Zealand business, and would not exceed 14 days.

“Our small business suppliers are an integral part of our supply chain and play a key role in helping us provide the products our customers need,” Woolworths chief financial officer Stephen Harrison said.

“We recognise that right now many of our small supplier partners are facing additional challenges in the current climate and we want to do our bit to further help them out by shortening payment terms across the group.”

This change would affect more than 1100 small suppliers, the retailer said.

In line with the Business Council of Australia guidelines, Woolworths said it classified small suppliers as businesses with $1m purchases by Woolworths and less than $10m annual turnover.