Tesco outsources design and QS work to India
Tesco has started to outsource work on UK projects to Indian architects and quantity surveyors based in India. Building reported that the retailer flew the workers to Britain last year, where they were trained in UK architecture and QS skills.
A source in Tesco’s supply chain told Building that the firm was only using Indian consultants for the initial stages of projects, and that when development reached the planning permission stage work would be transferred back to this country.
But an architect that works with Tesco said: “There is a worry this will spread beyond the planning stage and Tesco will try and do more of the project in India. It doesn’t operate like a traditional client – I wouldn’t rule anything out.”
A Tesco spokesperson confirmed: “We use Tesco staff to carry out feasibility studies on our new stores. These staff have been trained by Tesco and some are based in India.”
A source at a rival supermarket said it had decided not to go down the same route because “it wasn’t right”. The source said: “The savings are potentially massive. Given how keen Tesco have been in outsourcing other areas of business to India, such as IT, it is only a matter of time before they do the same with other parts of the construction supply chain. This could mean a lot less work for British construction.”
Last year the Association of Consultancy and Engineering hit out at Tesco for boosting record profits by seeking cuts of up to 40 per cent from construction suppliers.
At that time, Nelson Ogunshakin, chief executive of the ACE, told Building: “Telling consultants at the front end of delivering key services to cut their fees by 40% is not the action of an enlightened client.”
Tesco's move conicides with the publication this week of research by the Construction Industry Council and ConstructionSkills that showed consultants are continuing to suffer in the downturn. Of 300 practices surveyed, 54% said their income had fallen in the 12 months to October 2009. About 46% said they had made redundancies over the period.