Woolworths Group is making temporary changes to its payment policy to speed up the process of paying suppliers in a bid to ease finanical stress during the uncertainty surrounding COVID-19.
While small trade supermarket suppliers are paid within 14 days, across the rest of the Group it could be 30 days from receipt of a correct invoice or receipt of goods before small suppliers are paid.
From Tuesday, changes to the policy will see the Group’s 1100+ small suppliers, such as those for BIG W, Endeavour Group and New Zealand, paid within 14 days.
“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,” Woolworths Group chief financial officer Stephen Harrison said on Tuesday.
“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.”
Businesses with $1 million purchases by Woolworths and less than $10 million annual turnover are classified as “small suppliers” according to the Business Council of Australia.
“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,” Harrison added.
The revised Small Business Policy will be in place until June 30, when the situation will be reassessed.
Last week, the retail group offered rental relief for its tenants across its 28 owned shopping centres and other retail assets throughout Australia.