Lockhart Catering Equipment has informed suppliers that it will be changing its payment terms in response to the rapid growth of its business in the UK.
Lockhart wrote to suppliers at the end of last month notifying them that it will now take longer to pay invoices as a result of the “increased volumes” of business it is doing with them.
The firm has been one of the fastest-growing distributors in the market over the last 24 months, implementing new product and marketing strategies that have helped the business to flourish.
It said that payment terms would be amended to a cycle of “end of month + 60 days” due to the organic growth and new business wins that it has seen in the past 2 years.
“As a direct result of increasing volumes we have experienced the need to review our supplier payment terms to ensure we continue our growth over the next 12 months,” it stated.
In the letter, Lockhart said that switching to end of month + 60 days was “in-line” with industry standards. It is not clear if all suppliers have been asked to abide by the new terms.
Some suppliers who have received the letter told Catering Insight they were concerned that the move could have an impact on their cash flow given that they have their own suppliers or factories to pay.
But in its letter, Lockhart asked for suppliers’ understanding. “Our priority is to deliver cost efficiencies and affordable innovation to our customers, and we will continue to meet these challenges with your support,” it wrote.
Lockhart declined to comment on the change in payment terms, citing it as a confidential matter between itself and suppliers.