John Lewis’ head of constructon urges industry to reduce variable costs and bring projects in on budget
Tony Jacob, head of construction and maintenance for John Lewis Partnership, opened Building’s Supermarket conference this morning with a call for the construction industry to “get under the skin of the retailer”.
In the keynote speech to a packed conference, Jacob urged the construction supply chain to help John Lewis and Waitrose double in size by being faster, braver and more flexible.
Among his top priorities, Jacob said he wanted to reduce variable costs. He said, “People must understand that schemes have to be within budget”.
Speaking about procurement Jacob said the business had repeatedly found that it got better value for money through tendering building contracts rather than working through partnerships and negotiating contracts.
He said tendering led to prices being lower by “a factor of low double digit figures”.
However, he did say that JLP didn’t just take the lowest bid and as costs were on a downward trend he was now looking to see “how sustainable some of these low costs are”.
Jacob called on external suppliers to “think like a retailer and understand our needs”. He accused property services teams of spending “too much time arbitrating between external teams.”
He said: “We are looking for people to help us innovate but more than anything deliver on your promises, if you say you’re going to do something you need to do it”.
John Lewis and Waitrose have been surprise winners in the economic downturn, generating £4.5bn sales for 2009 and employing 72,000 staff. Expansion plans for Waitrose include spending £250m a year on new stores and upgrading estate for next three years. Jacob said: “If you don’t live near a Waitrose now, chances are you will soon.”
Sustainability was another challenge identified by Jacob, saying the business wanted to reduce carbon footprint while also expanding its operations.
Jacob pointed to John Lewis’ ‘Responsible Development Framework’, which outlines the business’ sustainability policy over the next decade.
This document sets out the aim to invest in its store estate, with the emphasis on refurbishment as much as flagship stores.