Tesco chief executive Dave Lewis has apologised to suppliers, together with its customers and other stakeholders for “the bad choices of the past”, made in the tiresome pursuit of unsustainable profit.
The UK's leading retail giant states it will no longer use a mix of complex and varied terms, and will instead introduce a new standard approach which will offer specific concessions to help small and medium-sized businesses.
It is anticipated that the move will grant suppliers to bring into the spotlight things that matter for customers, something Tesco CEO Dave Lewis made eagerly clear was important to the future of Tesco at The Big Debate in London:: "We lost the virtuous circle - we focused on margin, not customers, and we made some bad choices," he told delegates, among offering numerous apologies for past behaviour by the supermarket towards its supply base and shoppers.
Mr Lewis said looking back, the supermarket had lost its way by pursuing margins to the detriment of the brand, customers and supplier relationships.
Under the changes, smaller suppliers, who deliver up to £100,000 worth of products in a year, will be paid within 14 days.
Meanwhile, medium-sized suppliers who deliver up to £10 million in product value per year will have their accounts settled five days quicker than larger suppliers in their category.
In the case of fruit and veg suppliers, payments to those in the latter 'up to £10m' category will now be made in 23 days, down from 28 days.
