UK's Morrisons speeds-up supplier payments during coronavirus outbreak

LONDON (Reuters) - British supermarket group Morrisons MRW.L plans to pay its smaller suppliers within 48 hours to help them get through the coronavirus pandemic, it said on Friday.

Britain’s fourth-biggest supermarket said the faster payments will support smaller suppliers’ cashflow during a difficult time for the British economy.

As of Thursday Britain had 590 confirmed cases of coronavirus and 10 people had died, health authorities said.

Morrisons has around 3,000 small suppliers including 1,750 farmers that will benefit from the move, it said. Currently its smallest food manufacturers are on 14 day payment terms.

The group is also temporarily re-classifying a smaller supplier from those with 100,000 pounds ($126,070) of business-a-year with the company to those with 1 million pounds or less of business.

That means an extra 1,000 businesses will qualify for the new payment terms.

“We are Britain’s biggest single foodmaker and we want to be there for the smaller foodmakers, farmers and businesses that supply Morrisons,” said Chief Executive David Potts.

The temporary payment terms will start next week and be reviewed at the end of May.

Morrisons, which trails market leader Tesco TSCO.L, Sainsbury's SBRY.L and Asda WMT.N in annual sales, is due to publish financial results for its 2019-20 year on March 18.

Reporting by James Davey; editing by Sarah Young