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Source: Holland & Barrett 

It took average of 68 days to pay suppliers’ invoices, with just 32% paid within 30 days. 

Holland & Barrett has been accused of treating its suppliers “shabbily” and having “poor payment practices” by the Small Business Commissioner.

The health food retailer has come under fire from Paul Uppal and senior MPs for taking an average of 68 days to pay its invoices, with just 32% paid within 30 days.

Uppal analysed Holland & Barrett’s invoice data from 1 October 2017 to 31 March 2018, and noted 60% of its invoices were not paid within the agreed terms. He said the retailer “doesn’t care about its suppliers or take prompt payment seriously”.

It comes as part of a government crackdown on businesses that take longer than a few months to pay suppliers.

The investigation into Holland & Barrett was sparked by a complaint lodged to the commissioner by a technology consultancy. The complaint related to a £15,000 invoice for search engine optimisation that was not paid by Holland & Barrett within the agreed 30 days.

Uppal contacted the retailer about the issue, and it then paid the invoice 28 days later - 67 days after it was first submitted.

In a response to the report, the health food retailer said it had experienced system issues that had delayed payments to its suppliers, adding that “significant investment” had been made to improve payment systems and processes during the period that was assessed.

“Holland & Barrett shares the view that prompt and reliable payment of suppliers, particularly small suppliers, is both critical to Britain’s economy and the morally right way to do business,” a Holland & Barrett spokeswoman told The Grocer. “Although embarrassing, we appreciate the small business commissioner and parliamentary committee bringing attention to this important issue. We are determined to eliminate late supplier payments. We look forward to working more closely with the commissioner and others in government to ensure we become a model of good practice.”

Read more: Holland & Barrett to hire ‘several hundred’ new staff as part of digital push

It admitted the period Uppal measured was “particularly poor” in terms of it paying suppliers on time, adding it was addressing the matter. “Since the business was acquired by L1 Retail in 2017, we have been building a new executive leadership team and changing the culture of the company to be better fit for the future. In that future, Holland & Barrett aspires to be a partner of choice for suppliers, and thus its payment practices must be improved,” the spokeswoman said.

The retailer added it had already begun reviewing and updating existing supplier contracts, and would contact all its partners to discuss how it can better meet mutual commitments. It has also “invested substantially” in digitalising the business through new technology, including the imminent rollout of a new electronic payment system, which it insisted “should improve current payment performance substantially and help ensure this type of issue will not occur again”.

The Small Business Commissioner said it was consulting on further reforms that include making the board of a company responsible for improving payment practices.

Chair of the Business, Energy and Industrial Strategy Committee, Rachel Reeves MP, added: “Consumers would be appalled to hear that a big name such as Holland & Barrett is treating their suppliers so shabbily. It is outrageous that a company takes on average 68 days to pay its invoices and pays 60% of them outside of agreed terms.”