Tesco and Asda are increasingly relying on their suppliers for free finance which has helped fuel their growth, an investigation has claimed.

The investigation, conducted by the Financial Times using the supermarkets’ balance sheets filed at Companies House, found that the retailers were using trade credit tactics to a much greater extent than their European and US rivals.

It claims that the amount owed to Tesco’s creditors has risen by £2.2bn in the past five years, while Tesco’s stocks have increased by £700m, providing £1.5bn to help fund its businesses.

Similarly, at Asda, trade creditors have increased by £700m in the past five years while stock have grown by £200m, leaving Asda with a net benefit of £500m.

However, both Tesco and Asda defended their payment terms.

Tesco spokesman Jonathan Church said: “An increasing proportion of our business is now done overseas where traditionally longer payment terms exist. Similarly, we sell more non-food nowadays, where again the payment terms are traditionally longer.”

“We have a good record of payment on time and our terms are always agreed upfront with suppliers,” he added.

Robert McWilliam, head of business change at Asda said that the increase in creditors compared with stocks was because of Asda’s non food sales which have been growing at triple the rate of food sales.

He added that Asda pays its perishable suppliers such as meat processors, more quickly than those of non-perishables.