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TERMS OF PAYMENT FOR PURCHASE OF GOODS IN RETAIL GROCERY STORES IN THE CZECH REPUBLIC

Z. Pecinova, M. Patak, L. Branska

Abstract

Currently, a major trend is development of cooperation among business partners in value chains aiming to provide maximum value to the final consumer, creating thus conditions for long-term prosperity of all partner links. Essential for effective functioning of grocery value chains is the final link in the chain, i.e. retail stores, which, because of their direct relation to the final consumers, significantly increase the value of the efforts of previous links in the chain. Collaboration among partners is increasingly focused not only on material and related information flows, but also on financial flows. For this reason, important are terms of payment applied on purchases of products and goods in the chains, i.e. also on purchases for retail stores. Payment terms are an important factor that affects not only the prosperity of each individual article, but indirectly also the satisfaction and loyalty of end customers. Examining the terms of payment applied on purchases of products was the subject of a quantitative research that was carried out in retail grocery stores in the Czech Republic. The main objective of the research was to determine what methods and terms of payment are applied on purchases and what factors affect the terms of payment. Methods of descriptive and inferential statistics were used to analyse data obtained through personal inquiries in various retail stores. The analysis of the results of the research has showed that the most frequently used methods of payment are cash payments and bank transfers. As for payment dates, primarily business loans with a maturity of 30 days are used, quite frequent are also requirements for payment on delivery. Although the date and method of payment for delivered goods are, according to retailers, affected by many factors, most important are experience from the past and the length of mutual cooperation. Interesting findings were brought by an analysis of the difference in the method and timing of payment depending on the size of retail stores and depending on whether they were separate stores or stores that are part of retail chains. The research has demonstrated a high level of requirements for payment in cash as well as the use of credit loans with a relatively short maturity, which is detrimental to operation of retail stores. It currently adversely affects the effective functioning of the entire grocery chain and should be subject to further improvement.

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DOI resolver: doi.org/10.5593/sgemsocial2015/b22/s7.117

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