Target suppliers, last weekend marked a new change in how the Minneapolis-based retailer makes its payments. According to a report from CBS Local WCCO, Sunday, July 30 was the first day Target went by its new payment policy—paying vendors for items later and at a considerable discount.
As explained by the source, some vendors will now be paid for their items 30 days later, a time period WCCO notes is at least twice as long as before. Target will also reportedly take a 2-percent discount across the board. The retailer said it will be updating and standardizing its terms to simplify the payment process and to help both itself and vendors operate more efficiently.
“In May, we notified a number of our vendors that Target would be updating and standardizing our payment terms, effective July 30,” said Joshua Thomas, Senior Director of Communications for Target, in a statement to WCCO. “These updates simplify the payment process and are aimed at helping us and our vendors operate more efficiently. A standardized approach like we are implementing is consistent with retailers of Target’s size and scale across the industry. We don’t anticipate these updates will have any impact on guests who shop at Target.”
Back in May, Reuters published an article which claimed that Target would be “cracking down on its relationships with suppliers,” tightening deadlines for its deliveries and increasing fines for those who miss the deadline. According to the source, this is a similar plan to one that Walmart and Amazon have already put into practice.
Will this method of vendor payments become the industry norm as more and more large-sized operations adopt the plan? Deli Market News will continue to report.