- Sainsbury’s aims to use Microsoft’s artificial intelligence and machine learning tools
- He said customers will get a “more interactive online shopping experience.”
Sainsbury’s has agreed a five-year deal with Microsoft to use the software giant’s artificial intelligence services as part of its cost-cutting strategy.
The strategic partnership will see the supermarket giant employ Microsoft’s artificial intelligence and machine learning tools to improve store operations and provide “more efficient and effective service.”
Sainsbury’s said customers will benefit from a “more interactive online shopping experience”, while employees will gain access to real-time data, helping them speed up shelf replenishment.
New agreement: Under the five-year strategic partnership, Sainsbury’s intends to use Microsoft’s artificial intelligence and machine learning tools to improve store operations.
The supermarket chain also said the alliance would strengthen returns for shareholders under its ‘Save and Invest to Earn’ program and help achieve the objectives set out in its Next Level Sainsbury’s strategy.
Launched in February, the plan calls for £1bn in cost reductions over the next three years while investing in technology and automation.
The cost cuts will partly come from using fewer but larger warehouses with more automated robots, which the FTSE 100 company says would reduce working capital and double productivity.
Over the same period, Sainsbury’s proposes to increase capital spending to between £800m and £850m, and is targeting at least £1.6bn in free cash flow from its retail operations.
It also intends to reduce its overall merchandise and clothing offering at some outlets to improve the variety of food available in stores for shoppers.
Since the strategy was unveiled, Sainsbury’s published its annual results showing its sales rose 3.4 per cent to £36bn in the year to March.
The sales growth, which the grocer partly attributed to shoppers abandoning discounters Aldi and Lidl, helped the company’s profits rise 1.6 per cent to £701m.
Clodagh Moriarty, Sainsbury’s retail and technology director, said the deal with Microsoft “will accelerate our ambition to become the UK’s leading AI-powered supermarket”.
He added that it would help the company “take another huge leap forward in efficiency and productivity, continue to provide leading customer service and generate returns for our shareholders.”
Clare Barclay, CEO of Microsoft UK, said: “Sainsbury’s has delivered a bold vision that puts AI at the heart of its business, accelerating the development of new services, which will improve and transform the experience for customers and colleagues.”
sainsbury shares They rose 1.8 per cent to 282.2 pence on Friday morning.
