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Coronavirus: Morrisons to pay small suppliers immediately

morrisons shopping basketImage copyright MOrrisons

Supermarket chain Morrisons is to pay its small suppliers immediately to help keep them afloat amid coronavirus uncertainty.

The move aims to help suppliers get through any difficulties caused by the spread of the disease, a spokesman said.

Morrisons is the first major UK supermarket to make this kind of change to its payment terms.

It follows government measures to support small firms and the UK economy.

Small firms supply Morrisons with thousands of its products. Paying them immediately will help them weather any difficulties they face through disruptions to their manufacturing processes, or if any of their staff go sick, the spokesman said.

“We’re aiming to help them through the next weeks and months,” he said. “We want to help local producers, farmers, and fishermen during an uncertain time.”

For the smallest suppliers, with an annual turnover of £100,000 or less, the normal Morrisons payment period is 14 days. For firms with a turnover between £100,000 and £1m, that period is from 30 to 60 days.

All firms with a turnover of up to £1m will be paid immediately. For larger firms, the payment period will remain at 60 days.

For certain products, including hand sanitiser and staples such as toilet rolls, pasta, and rice, some supermarkets have been racing to keep up with demand as consumers clear shelves.

Coronavirus help

David Potts, chief executive of Morrisons, said in a statement: “We are Britain’s biggest single foodmaker and we want to be there for the smaller foodmakers, farmers and businesses that supply Morrisons.”

Mike Cherry, the national chairman of the Federation of Small Businesses, said firms “trying to cope in the face of the Coronavirus outbreak need all the help they can get”.

The Morrisons move is “heartening and very welcome”, he said.

“Morrisons haven’t got the best track record when it comes to prompt payment so this is a good step in rectifying this,” he added, saying he hoped other big businesses would follow suit.

Major UK supermarkets Tesco, Sainsbury’s and Asda were approached for comment.

The move was welcomed by Environment Secretary George Eustice, who said: “These measures will support our farmers and food producers in their vital work of feeding the nation.

“We already have a highly-resilient food supply chain in this country and I am continuing to work closely with Morrisons and other retailers on their response to coronavirus.”

The Morrisons move comes after Budget announcements designed to help small businesses and the UK economy. The BBC has contacted other major supermarkets, but has yet to get a response.

Chancellor Rishi Sunak suspended business rates for retail, leisure and hospitality firms for 2020 this week as part of a Budget designed to help the UK economy face coronavirus disruption.



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