Aldi will start paying its small suppliers more than twice as fast as before in a move that will benefit around 400 UK businesses, the retailer has announced.
From 11 September the German supermarket chain will shorten its payment terms from 33 to 14 days for annual transactions of up to £250,000.
The discounter said the move, which applies to suppliers of fresh produce, among other products, was one of several initiatives to support its supply base. These include ensuring suppliers do not make any financial commitments without prior assurances on cost and volumes; keeping buying patterns stable throughout the year; and not running ‘buy one get one free’ or multibuy promotions.
Aldi’s managing director of buying, Tony Baines, said: “We recognise that cost pressures across the supply chain are increasing and placing a strain on smaller businesses in particular. Reducing payment terms to our smaller suppliers should help ease some of this pressure.”
The retailer’s approach to supplier relations was recently recognised as the best in the supermarket sector by the Groceries Code Adjudicator (GCA), with Aldi topping the GCA’s annual Groceries Supply Code of Practice (GSCOP) supplier survey for the fourth consecutive year.
As the UK’s fifth largest supermarket chain by market share, Aldi opened its 700th store earlier this year. The company said it remains on course to open 1,000 stores by 2022.