In recognition of the economic uncertainty many of its small business supplier partners are facing, Woolworths Group will temporarily change its payment 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.
From today, the payment terms for eligible small suppliers will be aligned across the entire Group (including Goods Not For Resale, BIG W, Endeavour Group and New Zealand) and will 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," said Woolworths Group Chief Financial Officer Stephen Harrison.
“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.
“By paying our small suppliers faster, we hope to ease some of the financial pressure many of them are currently experiencing amid the uncertainty caused by the coronavirus pandemic.”
This change will have a positive impact on more than 1,100 small suppliers, providing goods and services to Woolworths Group businesses.
In line with the Business Council of Australia, Woolworths Group classifies small suppliers as businesses with $1million purchases by Woolworths and less than $10million annual turnover
“We understand this is a challenging time for many and we hope this additional support provides our suppliers with some assistance through these unprecedented times.”
Woolworths Group revised Small Business Policy will continue until the 30th June 2020 when it will be reassessed based on the situation at that time.
The move follows the announcement last week that Woolworths will offer rental relief for its tenants in its 28 owned shopping centres and other retail assets throughout Australia.