Physical Retailing

Executive Payment Performance Summary: Physical retailing Sector

We have undertaken a detailed review to analyse the payment behaviour of 73 companies within the Physical retailing sector, aiming to establish benchmarks for credit risk and liquidity management. The central tendency of the data suggests a payment culture that generally extends beyond standard 30-day commercial terms. With an average payment time of 43.5 days and a median of 41 days, the sector demonstrates a propensity to settle invoices in the middle of the second month following the invoice date. Whilst this is not indicative of severe systemic distress, it highlights a common practice where businesses likely align payment runs with month-end processing cycles rather than adhering strictly to immediate due dates. The standard deviation of 20.1 days is significant, indicating that payment speed is not uniform across the sector; rather, it is highly dependent on the specific internal policies and cash flow strategies of individual firms.

A deeper examination of the distribution reveals that the sector is heavily weighted towards moderate payment schedules. The largest concentration of companies, comprising 34.2% of the sample, falls within the 31-45 day 'Moderate' bracket. When combined with the 'Fast' payers (0-30 days), who represent 24.7% of the sample, we realise that nearly 60% of the sector manages to settle debts within a respectable six-week window. However, the interquartile range—spanning from 31 days (25th percentile) to 52 days (75th percentile)—reinforces the view that suppliers should organise their cash flow expectations around a 45-day baseline when trading within this industry. It is noteworthy that only five companies qualify as top performers, settling accounts in fewer than 20 days, with the fastest payer achieving settlement in just 8 days.

Despite the stability of the median, there are concerning signals regarding late settlements and outliers. A significant minority of the sector (17.3%) takes over 60 days to pay, and the data indicates that 24.5% of all payments are classified as 'late' against agreed terms. This behaviour presents a tangible risk to the supply chain. The disparity between the fastest payer (8 days) and the slowest payer (132 days) is stark, illustrating an immense gap in operational efficiency and liquidity between the best and worst performers. The tail end of the distribution includes two critical cases taking over 90 days to pay; such extreme delays often characterise companies facing severe liquidity challenges or those that aggressively leverage supplier credit to fund their own working capital.

Geographically, the sample appears to centre around London, which accounts for 17 of the companies analysed, followed by an even spread across the East of England and the North West. However, the location appears less significant than the operational culture of the specific firms. In summary, whilst the median performance of the Physical retailing sector is acceptable, the high standard deviation and the fact that nearly one-quarter of payments are late suggests suppliers must remain vigilant. Credit controllers should favour stricter collection processes for new accounts in this sector until a consistent payment pattern is established, as the risk of extending credit beyond 60 days is non-negligible.