Britain's five largest high street retailers were late in paying a shocking 80 per cent of their invoices to suppliers last year, a report today has revealed.
MarketInvoice, a peer-to-peer platform for selling invoices online, has found that late payments to suppliers rocketed last year, with high street retailers John Lewis, Boots, Home Retail Group, Marks & Spencer, Kingfisher among the worst offenders.
These five paid 82.9 per cent of their bills after they were due compared with an average of 69.8 per cent for all high street names, according to the report, which analysed over 30,000 invoices – of which 500 were from retailers.
A spokesperson for Boots has refuted the claims, saying they "do not reflect any internal audits that [they] have recently undertaken".
John Lewis, Marks & Spencer and Home Retail Group have also questioned the findings. A spokesperson for the Argos owner said: "We totally refute these figures. As part of our values in maintaining a good working relationship with all our suppliers, we agree and confirm the terms of payment at the start of the contract and pay in line with those agreed terms.”
An M&S spokepserson said: “We take responsible procurement very seriously and don’t recognise these numbers at all. We process over three million invoices every year and on average around 99 per cent of these are paid on time. When mistakes do happen we work hard to fix them as soon as possible. In support of timely payments to all suppliers, but especially small and medium enterprises, we have signed up to the Prompt Payment Code, which comes into force in April 2016.”
The report showed that supermarkets paid 68.7 per cent of their invoices after the due date. That compares with 60 per cent for large companies across all sectors.
Retailers have come under increasing pressure to reform their supplier practices in the wake of Tesco’s accounting scandal in 2013, when payments were delayed in order to avoid missing targets.
Anil Stocker, chief executive of MarketInvoice, said: “There’s a clear culture of systematic late payment at the heart of the UK’s largest high-street corporates.
“With small businesses often reliant on these household names, they are in position of real power, and they are abusing that power. No one wants to bite the hand that feeds, so suppliers are stuck in a hard place.”
The report found that bills were paid, on average, six days late, with more than one in five paid more than two weeks late.
The UK lags behind the rest of Europe, where 40 per cent of invoices are paid late. The average UK payday for suppliers is almost six days late compared with 0.3 for Europe.