Sainsbury’s and Microsoft Announce Five-Year Strategic AI Partnership

Sainsbury’s, a leading retail chain in Britain, announced a five-year partnership with Microsoft to leverage the tech giant’s artificial intelligence (AI) capabilities alongside the supermarket chain’s extensive data.

Microsoft AI tool Copilot
@ Microsoft

This collaboration aims to drive revenue growth and cost savings by enhancing personalized shopping experiences and improving staff efficiency. Sainsbury’s reported profit of £137 million (down 33.8 percent) on revenue of £36,337 million (up 3.4 percent) in fiscal 2023-24.

Sainsbury’s, the UK’s second-largest grocer after Tesco, plans to utilize AI to offer a more interactive online shopping experience and enhance search functionalities. In physical stores, staff will gain real-time data and insights to optimize key processes such as shelf replenishment.

The partnership, as part of Next Level Sainsbury’s strategy, is also expected to reduce the time to market for new services and product innovations, although no financial details were disclosed.

“Our collaboration with Microsoft will accelerate our ambition to become the UK’s leading AI-enabled grocer. It’s one of the key ways we’re investing in transforming our capabilities over the next three years, enabling us to take another big leap forward in efficiency and productivity, continue to provide leading customer service,” Clodagh Moriarty, Sainsbury’s Chief Retail and Technology Officer, said.

In February, Sainsbury’s updated its market strategy, setting a new cost-savings target of £1 billion ($1.3 billion) over three years. Last month, the company forecast up to 10 percent profit growth for the current financial year, which began on March 3, expressing confidence in its ability to attract more customers.

Sainsbury’s recently said it is simplifying technology processes using cloud technology. This is helping with allocation and replenishment processes, enhancing customer personalisation and rewards and supporting the safety and stability of operations. By automating some of the processes within contact centre, Sainsbury’s is delivering a more seamless customer experience and faster resolution times, while saving colleagues’ time.

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