Retailers are continuing to fail to pay small suppliers on time, Accountancy Age can today reveal.

Despite widespread criticism of retailers treating their small suppliers with disdain, analysis of 4,500 invoices submitted to UK retailers under £5,000 for the first six months of 2006 show that retailers are continuing to pay late.

The National Farmers' Union (NFU) branded the results 'shocking' this week, as retailers sought to defend themselves against the charges.

The research carried out by Accountancy Age, in conjunction with credit specialists Graydon, showed that Tesco had paid dramatically fewer small invoices to suppliers on time compared to last year.

Last year the UK’s biggest retailer paid 87% of its invoices below the value of £5,000 within terms, falling to 67% this year.

Along with Tesco, Somerfield and Morrisons both paid suppliers later in 2006 than last year.

Tesco professed surprise at the findings: ‘We are very surprised at these findings, as our suppliers tell us they are happy with our record on payment. In our 2006 Viewpoint survey - which is the largest anonymous supplier survey of its kind – 95% of invoices paid within terms of our suppliers said that Tesco was reliable at paying them on time,’ a spokeswoman said.

Morrisons said that the well publicised problems with its IT systems last year had led to some delays in payment. 'During the integration of the Safeway and Morrisons systems, there were inevitably some small delays,' said in a statement.

Somerfield paid 42% of invoices under £5,000 within terms. Somerfield are now paying 7% fewer invoices within terms compared to last year. The figure for Boots was 46%, a slight improvement on last year when 41% were paid on time.

Kevin Pearce, head of food chain and farm policy for the NFU, said: 'In the current climate of rising costs suppliers need to be able to rely on the payment terms that have been agreed in order that their cash flow can be maintained. These statistics are shocking and further demonstrate our view that there is a serious imbalance of power in the supply chain, with some of the retailers treating their suppliers appallingly.'

Marks & Spencer, which has seen a turnaround in its overall fortunes, was the great success story of the figures (64%), increasing substantially the invoices paid on time.

The Federation of Small Business said small suppliers were often ‘bullied’ into not chasing payment.

'If a big client moves the goalposts, you’re in a very tough situation,' said an FSB spokesman.

PAID ON TIME?

% of invoices paid within terms:

Tesco: 67%
Boots: 46%
Somerfield:42%