Jumbo wins award for driving sustainability in the supply chain
03 December 2019 |
London, UK – Jumbo Supermarkten, the second-largest grocery retailer in the Netherlands with 650 shops, was honored on 28 November as the 2019 Retail & Apparel winner at the Supply Chain Finance Community Forum Europe in Amsterdam.
Judges for the SCF award praised Jumbo for an early payment programme launched with C2FO that focuses on supply chain sustainability and social responsibility.
Jumbo prides itself on exceeding expectations for every customer, offering the best service and largest range of products at the lowest price. The retailer now wants to ensure its acute focus on customers’ interests also extends to its suppliers and their financial sustainability—particularly for small- and medium-sized enterprises (SMEs).
Motivated by a need to be a socially responsible company, Jumbo partnered with C2FO to create an early payment and dynamic discounting platform that would enable the retailer’s suppliers to access liquidity far more quickly and efficiently. The programme helps Jumbo live up to the requirements of the Netherlands government-backed Betaalme.nu or PayMeNow initiative, which promotes fair payment practices for small- and medium-sized businesses. SMEs are a vital component to the Dutch economy and yet are financially vulnerable if larger buyers impose lengthy payment terms on them.
“With their programme of payment solutions tailored to small, medium and larger suppliers, Jumbo takes real responsibility for sustainable payment terms and is amongst a small group of companies that act as a leading example in this area,” says Joost van den Hondel of Betaalme.nu.
The early payment platform helps Jumbo fulfill its goal of maintaining the long-term sustainability of its supplier network. This was a greater motivating factor for Jumbo than achieving specific working capital ratio goals or other financial targets, as is often the case for buyers setting up SCF programmes. The dynamic discounting arm was launched in June 2019 with great feedback from suppliers. Suppliers that do choose early payments accept a small discount on their invoice, which Jumbo says is purely to cover the costs of running the programme.
The importance of the early payment scheme to Jumbo’s broader corporate and social responsibility strategy is demonstrated by the programme’s inclusion in Jumbo’s financial reports in April 2019 and the full endorsement from the retailer’s CFO and CEO.
Suppliers have welcomed the new programme, with feedback demonstrating that SMEs are keen to have shorter payment terms that avoid them having to look for other, more expensive sources of financing to support their working capital needs. Suppliers also praised the ability to choose which invoices to accelerate, depending on their financial requirements at that time in their business cycle.