Morrisons has pledged to pay its small suppliers immediately to help them through the Coronavirus outbreak.
In doing so, the supermarket chain becomes the first of its kind in the UK to make this kind of change to its payment terms and follows government measures to support small firms and the UK economy.
SMEs are vital to their supply chain. Paying them immediately will help them weather any difficulties they face through disruptions to their manufacturing processes, staff sickness, a spokesman said.
For the smallest suppliers, with an annual turnover of Ј100,000 or less, the normal Morrisons payment period is 14 days. For firms with a turnover between Ј100,000 and Ј1m, it is from 30 to 60 days.
All firms with a turnover of up to Ј1m will be paid immediately. For larger firms, the payment period will remain at 60 days.
For certain products, including hand sanitiser and staples such as toilet rolls, pasta, and rice, some supermarkets have been racing to keep up with demand as consumers stockpile.
David Potts, chief executive of Morrisons, said in a statement: “We are Britain’s biggest single food-maker and we want to be there for the smaller food-makers, farmers and businesses that supply Morrisons.”
Mike Cherry, the national chairman of the Federation of Small Businesses, described the move as “heartening and very welcome” and hoped other big businesses follow suit.
Chancellor Rishi Sunak earlier suspended business rates for retail, leisure and hospitality firms as part of his debut Budget.