The UK and Ireland arm of supermarket group Aldi has said it is cutting payment terms to its smallest suppliers to 14 days, with effect from September 11th. Its current terms are reported to be 33 days. More than 400 suppliers that do up to £250,000-worth of business a year with the retailer are expected to benefit.

Tony Baines, managing director of buying at Aldi, said, “We recognise that cost pressures across the supply chain are increasing and placing a strain on smaller businesses in particular. Reducing payment terms to our smaller suppliers should help ease some of this pressure.

“Our relationships with suppliers are based on longevity and trust.  We have worked with many of our current suppliers since we entered the UK market more than a quarter of a century ago, and are always looking for ways in which we can work more effectively with them.”

Aldi, the UK’s fifth-largest supermarket with more than 700 stores, says it also helps suppliers by ensuring they do not make any financial commitments without prior assurances from Aldi on cost and volumes, keeping buying patterns stable throughout the year, and not running ‘buy one get one free’ or multibuy promotions. The retailer recently won the Groceries Code Adjudicator’s annual Grocery Store Code of Practice supplier survey for the fourth consecutive year.