Categories: Coronavirus

UK Grocers Vow Faster Supplier Payments

Supermarkets Sainsbury’s and Aldi are joining the growing number of retailers pledging to reduce the time it takes to pay suppliers as the coronavirus pandemic continues, according to a KamCity report.

The retailers follow in the path of others like Tesco and Morrisons in trying to make things easier on everyone as jobs are disappearing, markets plunge and some essential businesses like grocery stores are overrun as people panic.

Sainsbury’s said it would be providing instant payment to 1,500 suppliers with less than £100,000 annual turnover, and would also work with finance for some companies to help them increase production and cash flow.

Aldi is going to cut payment terms, which will let around 1,000 of its suppliers with less than £1 million in turnover be paid instantly. The company is also giving a 10 percent bonus to its store and distribution staff in recognition of their work to keep things going amid the coronavirus pandemic.

And, Aldi has ideas on how to help with social distancing during these times, implementing clear screens at checkout and putting down line markers to encourage people to stand a sufficient distance apart from one another while shopping. These sorts of methods, now employed by several retailers, are attempts to prevent the spread of the virus through close personal contact.

Operating hours at Aldi have been slashed as well, giving staff more time to re-stock the shelves without people purchasing things around them.

The coronavirus pandemic has seen retailers taking actions to try and mitigate the economic fallout that has come with the virus, and cutting the time it takes to pay suppliers has been among the methods utilized, in order to keep money flowing and reduce stress.

Another method in sync with social distancing has been contactless payments, meaning those that do not involve cards or cash — by avoiding those methods, the spread of the virus could be contained.

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LIVE PYMNTS ROUNDTABLE: MODERNIZING & SCALING FOR THE NEW NORMAL

The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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