Grocery giant Tesco is taking steps to improve its relationship with suppliers by implementing a new payment system based on trust and efficiency. 

The retailer is expanding its Good Faith Receiving (GFR) auditing system, which aims to streamline the payment process and reduce disputes over stock deliveries.

The GFR system operates on the principle that most supplier deliveries are accurate, allowing for timely payments without delays caused by discrepancies in volume or stock condition. Any issues that arise are addressed later, typically on a quarterly basis.

The Grocer reports that Tesco is now rolling out the system to a larger number of its chilled suppliers after delivery accuracy and on-shelf availability was improved during a trial.

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To ensure fairness and transparency, deliveries will be checked on a sample basis by an independent third party. Tesco has also established a dedicated GFR team to support suppliers through the transition, offering webinars and site visits to ease the implementation process.

This move puts Tesco in line with several of its competitors, including Sainsbury’s, Morrisons, Asda, Co-op and Waitrose, who have been using GFR systems for several years. 

The adoption of GFR by these retailers came after pressure from the Groceries Code Adjudicator (GCA) to address issues of late payments and unfair deductions.

The current GCA Mark White recently highlighted the ongoing concern of late payments in the industry. In the 2024 GCA supplier survey, 14% of respondents reported experiencing payment delays in the past year. 

Tesco’s adoption of the GFR system is voluntary for suppliers, allowing them to opt in or out.