Britain鈥檚 leading supermarkets are overhauling construction contracts as part of their relentless drive to cut costs and build faster. At the same time, they are examining ways of tightening their health and safety regimes amid concern that workers will be at risk as contractors battle to hit ever-tighter deadlines.
These were two of the main themes to emerge from a one-day conference entitled 鈥淲inning Work in the Food Retail Sector鈥�, organised by 好色先生TV and sponsored by I-scraper.com, a company offering on-line construction management systems to clients and industry professionals. The UK鈥檚 food retailers spend 拢3bn a year on construction 鈥� about 5% of the industry鈥檚 total output. The sector is dominated by the 鈥渂ig four鈥� supermarket chains 鈥� Tesco, J Sainsbury, Asda and Safeway 鈥� three of which were among the speakers at the conference, held at London鈥檚 CBI Conference Centre on 16 June.
We may have to stop work at night [if there is concern that the supervision of workers may not be adequate]
Bob Simpson, Asda
As the various heads of construction at the supermarket giants explained, the price war between them means they are under phenomenal pressure to deliver better buildings in less time and for lower cost. Kevin Pleass, Tesco鈥檚 operations director, told the 180 delegates that, following a 40% reduction in average development costs from 1992 to 1999, he has been charged with delivering a further 30% reduction between 1999 and 2003. Pleass said Tesco was already on track, having sliced 31% off costs since March 1999. This was done through a 鈥渇antastic team effort鈥� between the supermarket and its construction industry partners, and a 鈥渮ero-based approach to the design of every component鈥� in its standard store. This means suppliers had to ask whether every item was really needed before they specified it.
Pleass ascribed much of Tesco鈥檚 success to its use of partnering. Apart from the usual open-book approach to profit and the use of key performance indicators, the supermarket has cut contracts to a single page and eliminated retention moneys. Pleass said of retention: 鈥淚t鈥檚 dated, and offers no real value. You wouldn鈥檛 keep back part of an employee鈥檚 salary at the end of the year if he did a bad job, would you?鈥�
Retention is dated鈥� you wouldn鈥檛 keep back part of an employee鈥檚 salary if he did a bad job, would you?
Kevin Pleass, Tesco
Sainsbury, too, has one-page contracts, and is also against retention, as is Asda. Bob Simpson, Asda鈥檚 head of development, told delegates:
鈥漌e shouldn鈥檛 really have retention. We want long-term relationships, and there has to be a degree of trust.鈥� Like Tesco, Asda is targeting its construction performance. Costs have been cut by 25% in the past two years and the company is now building a store in 12 weeks 鈥� 15 or 16 is regarded as very good now. 鈥淸The construction time] will come down another 10-12% by the end of next year,鈥� Simpson added. Encouragingly, Asda鈥檚 performance compares favourably with that of its new parent, Wal-Mart, which manages an average construction time in the USA of seven months. The US giant is seeking to reduce that to five months, which will give it an extra 560 weeks of trading across the group.
Unless we take health and safety seriously we are just waiting for a blue-chip client to have a big accident
Rob Carpenter, J Sainsbury
However, there are fears among clients that the rush to open stores before the paint has dried will lead to more accidents on site. Rob Carpenter, senior construction manager at Sainsbury (which has cut construction time by 40% in the past five years), said: 鈥滺ealth and safety is absolutely key. Unless we take it seriously, we are just waiting for a blue-chip client to have a big accident, and it will be headline news.鈥� Later, in a question and answer session, Carpenter added that the biggest concerns were over the conversion of stores that remain open during construction, putting contractors cheek by jowl with customers. Sainsbury has launched a series of roadshows to discuss the issue with its construction partners, and Carpenter stressed that the supermarket would accept a contractor鈥檚 word that a deadline was not achievable rather than put workers鈥� safety at risk.
Asda鈥檚 Simpson also voiced concern about the risks to workers during refurbishment. In the Q&A, session he said: 鈥漌e are going to have a fundamental rethink of our demands,鈥� adding that 鈥渨e may have to stop work at night鈥� if there is concern that the supervision of workers may not be adequate.
