Tesco has extended its improved payment terms for smaller suppliers until next year to help businesses through the coronavirus crisis. 

The supermarket giant will continue to pay almost 2,000 smaller suppliers immediately, instead of the usual 14-day term, until January 31, 2021. 

Tesco said the move will mean smaller food businesses, which have been hammered by the pandemic, will “continue to be supported throughout the busy Christmas period and beyond”. 

Tesco chief product office Andrew Yaxley said: “With uncertainty in the food sector continuing, it’s vital we do all we can to support the small suppliers we partner with. 

“I’m delighted we’ve been able to confirm this improvement to payment terms until the end of January next year, giving smaller suppliers the certainty they need as we continue to navigate our way through the Covid-19 pandemic.”

Britain’s biggest grocer came under fire earlier this month after some suppliers claimed the retailer was insisting on “offensive” discounts.

Tesco is scrapping “disruptive” promotions in stores and focusing on everyday low prices in its fightback against Aldi and Lidl.

It launched its Aldi Price Match scheme on 200 products in March and is extending that to hundreds more lines including branded products.

Tesco boss Dave Lewis said last month: “I’ve been having this conversation with suppliers for six years. I don’t see why anybody should pay more for a brand in Tesco than anywhere else, so our job is to work with them to get to a place where we can be competitive in the marketplace. 

“It’s better for us to focus on large-volume lines that customers really want and invest our money together in the price of that, rather than deploying it across a range of promotions, which are disruptive in the supply chain and ultimately don’t give customers the best value.”