Aldi has increased its support for small suppliers by reducing payment terms to 14 days.
The new terms apply to all suppliers that transact up to £250k worth of business with Aldi and are effective from 11th September. More than 400 businesses will immediately benefit from this change.
The move is one of many initiatives that Aldi has in place to support its supply base. These include ensuring suppliers do not make any financial commitments without prior assurances on cost and volumes, keeping buying patterns stable throughout the year, and not running ‘buy one get one free’ or multibuy promotions.
Aldi’s approach to supplier relations was recently recognised as the best in the supermarket sector by the Groceries Code Adjudicator (GCA), with the retailer topping the GCA’s annual GSCOP supplier survey for the fourth consecutive year.
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.”
Aldi is the UK’s fifth largest supermarket by market share and opened its 700th store earlier this year. It remains on course to open 1,000 stores by 2022.
Baines added: “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.”