Tesco has said it will simplify its payment terms to suppliers as chief executive Dave Lewis apologised for its past trading tactics.
He told the press; “I want to make an apology for the way we behaved in the past. We are recovering from big, bad decisions.” Reports suggest that the retailer, which saw its underlying profits for the first half of this year fall 55 per cent, is in secret talks with the Serious Fraud Office about its £326 million accounting black hole, possibly with a view to agreeing a deferred prosecution agreement which would allow it to admit wrongdoing but avoid any immediate criminal sanctions.
Speaking at and IGD Conference in London earlier in October, Mr Lewis said Tesco will no longer use a combination of complex and varied terms, but will introduce a standard approach, which will offer concessions to help small and medium-sized businesses. Smaller suppliers, who deliver up to £100,000 worth of products in a year, will be paid within 14 days, whilst medium-sized suppliers who deliver up to £10 million in product value per year, will have their accounts settled five days quicker than larger suppliers in their category. For those supplying fresh produce to Tesco, payments will be made in 23 days, instead of the current 28 days.