Building open and honest partnerships with our suppliers

As the UK’s largest retailer, our reach goes much further than the 325,000 colleagues that work for Tesco and the millions of customers we serve each week. We also work with over 3,000 suppliers in the UK with links to communities up and down the country. To ensure we’re able to serve our customers a little better every day, it’s vital we build and maintain strong, open and honest partnerships with all our suppliers.

Over the last year, we’ve been working hard to get the foundations of the shopping trip right for customers. We’ve made prices simpler, we’ve put more colleagues into shops to give customers better service, and we’ve improved the availability of our most popular products. But these improvements must go hand-in-hand with supporting the businesses and people that work with us to grow, develop, make, pack, store and deliver every product we sell.

 We’ve been listening to our suppliers and one of the key things they told us was that our business had become too complicated to deal with.

We’ve been listening to our suppliers and one of the key things they told us was that our business had become too complicated to deal with. So painstakingly, we’ve been reviewing our processes to simplify the way we engage with our suppliers, to deliver long-term partnerships and solutions that benefit our customers.

One significant way Tesco has been working to achieve this, has been to simplify our trade terms with suppliers. Over the course of the next few months, we are standardising payment terms across the board, so that in the future they’ll no longer be faced with the prospect of having to navigate a combination of complex and varied terms.

Across the whole supply base, payment terms will be subject to a fair, transparent and consistent approach

Instead they can have confidence that across the whole supply-base, payment terms will be subject to a fair, transparent and consistent approach. Meaning that small and medium-sized businesses will be offered specific concessions to help them manage their cash flows, whilst for larger businesses, there will now be a clear and equal playing field.

Standardisation means that typically in the majority of categories, Tesco will be offering shorter payment terms to its suppliers than they in turn pass onto their own suppliers– an imbalance that I hope will be addressed further down the supply chain.

The UK economy has thrived on entrepreneurial spirit and the innovation of its businesses. By removing a key area of concern for our suppliers, I believe these changes will allow them to get back to innovating on behalf of customers.

Our customers want value, great availability and new choices. By ensuring this is at the heart of everything we do, we can continue to collaborate with suppliers and grow together. That’s good for customers. Good for suppliers. And good for Tesco.


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