Supermarkets and Department Stores

Executive Summary: Payment Behaviour Analysis for the Supermarkets and department stores Sector

As a senior business analyst specialising in UK commercial transactions, I have conducted a rigorous review of payment practices within the Supermarkets and department stores sector. This study, based on a sample of 21 companies distributed amongst key economic hubs including London, Yorkshire and The Humber, and the East of England, reveals a remarkably consistent payment culture. The data indicates that the sector operates with a high degree of predictability, evidenced by the perfect alignment of both the average and median payment times at 41 days. This synchronicity suggests a stable distribution curve where payment volatility is minimal. Furthermore, the standard deviation of 10.1 days is relatively low, indicating that the vast majority of businesses in this vertical adhere to a standard operating procedure that sits just outside the traditional 30-day settlement window.

When we analyse the distribution of payment speeds, it becomes evident that the sector does not favour rapid settlement. Only 9.5% of the companies analysed (2 entities) are classified as 'Fast' payers, averaging between 0 and 30 days. Instead, the centre of gravity for this dataset lies firmly in the 'Moderate' band (31–45 days), which accounts for 61.9% of the sample. This clustering is further supported by the quartile analysis; the interquartile range is a mere 13 days (spanning from 34 to 47 days), reinforcing the view that deviations from the norm are rare. Whilst 32.9% of individual payments may be settled within 30 days, the entity-level data suggests that suppliers should realistically plan for a cash conversion cycle closer to six weeks when trading with this sector.

Despite the lack of rapid payment speeds, the sector displays a healthy aversion to critical credit risk. There are zero companies recorded in the 'Critical' (>90 days) category, and the poorest performing entity averages 70 days—slow, but manageable. However, it is crucial to realise that late payments remain a tangible issue, standing at 15.3%. The data highlights a distinct ceiling on performance; with no companies averaging under 20 days, it is clear that early payment programmes are not currently a standard feature of this industry's financial behaviour. Consequently, whilst the risk of bad debt appears low given the absence of extreme outliers, stakeholders must organise their cash flow forecasts to accommodate a standard 41-day delay, rather than expecting prompt settlement upon invoice presentation.