Late-Paying Tesco Looks To Redeem Supplier Relations

Tesco faced a wave of public criticism early this year after government officials declared the retail and grocery giant had deliberately delayed payments to its suppliers for its own financial gain. It was a big story in a market already plagued by delayed and late supplier payments, an issue U.K. policymakers have taken to task.

The company has vowed to change its practices and took a major step towards that promise this week with the creation of two teams aimed at improving supplier relations.

Reports on Thursday (May 12) said Tesco created one group to manage invoices and another to manage new supplier onboarding.

According to reports, Tesco works with more than 5,000 suppliers. Since an inquiry launched by the U.K. Groceries Code Adjudicator, the company said it plans to be “fair, professional, knowledgeable and helpful” with its suppliers moving forward.

The deployment of these two teams to manage supplier relations, said Tesco Chief Product Officer Jason Tarry, is part of the ongoing change in how major corporations operate with their supplier partners.

“If last year was characterized by lots of change, this year, it’s about building on that,” he said in a statement. “By building trusted transparent partnerships, we want to free up our suppliers to concentrate on what they do best. Innovate. Use their expertise. Help us develop unique and differentiated products for our customers.”

The executive explained that the group focusing on invoices will work to resolve any invoicing and pricing issues. The second team will work with suppliers in their first six months with the company.

“As many small businesses will tell you, it can be quite daunting working with a large company for the first time, so we hope suppliers can draw on our knowledge and expertise in those crucial first months,” stated Tarry.

With some corporations now facing their critics head on when it comes to supplier payments, U.K. officials continue to tackle the matter themselves.

Earlier this month, the government moved the Enterprise Act into law. The legislation formally creates the position of small business commissioner, who will focus on ensuring corporations pay their suppliers on fair terms.