Chief Executive Officer, J Sainsbury plc (Sainsbury's)
Causonomics with Simon Roberts
This week, ahead of the busiest quarter for retail, Jo Causon catches up with Sainsbury's CEO Simon Roberts to chat about the importance of customer loyalty and retention in an increasingly competitive landscape.
Music copyright: Kevin MacLeod
About Simon Roberts
In a September 2024 podcast, Roberts discussed Sainsbury's use of artificial intelligence in its supply chain, stating that the company implemented an AI capability that improved product availability by three points and reduced food waste. He described the technology as helping the company send more accurate stock levels to stores. Roberts also spoke about the importance of being "purpose driven" as a business, arguing that a clear long-term vision helps teams make better short-term decisions. He noted that Sainsbury's uses AI to offer personalized prices to customers through its Nectar loyalty program, with millions of price permutations generated for individual shoppers.
Transcript (24 segments)
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Host0:04
Hello everyone and a very warm welcome back to another episode of Corson and the Customer, our weekly podcast discussing all things customer service and effective business leadership. Last time I had a fantastic discussion with the Financial Times consumer editor Claire Barrett. This week we have a timely discussion as we come into the golden quarter, the busiest period for retail. I'm delighted to be joined by Simon Roberts, CEO of Sainsbury's, to discuss challenges facing food retailers and what leaders should focus on. I thoroughly enjoyed this conversation.
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Simon Roberts2:46
Well, the first thing is Sainsbury's has been around for over 150 years. We focus on doing the best job for our customers in food. In the last few years, we've thought about what it takes to be customers' first choice. Price, availability, and new food ideas are key. We're in a competitive industry, and we must become more efficient while ensuring good service.
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Host4:59
On that, I think recently you were talking about how customers used to shop around more, but now they seem more loyal to a one-stop shop. Do you think that's because thinking beyond pricing to the whole customer journey and offering something for everyone?
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Simon Roberts5:31
That's a really good question. Coming through a pandemic and inflation crisis has changed how households shop. We see customers back in the office, busier, so they want convenience. They're eating at home more, so they desire new recipes. Online shopping is lifting again. Supermarkets with big ranges become the place customers want to go more often.
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Host7:35
That sounds like a tough gig. You have to drive price and offer variety. How do you differentiate? What makes Sainsbury's stand out?
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Simon Roberts7:52
I think we always need to be honest: in grocery, many things are similar. For us, quality has been a foundation for 50 years. We've worked to make savings across the company and reinvest in better value. We now have the best value we've had in over a decade. We offer about 30,000 food products and introduce 1,500 new products every year. Innovation is massive, especially for Christmas.
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Host9:54
Any sneak previews?
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Simon Roberts9:56
There are lots of treat items. Game pie is going to be a big hit. Lots of new snacking and party foods to celebrate with.
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Host10:33
You mentioned innovation but also the tension between delivering brilliant service and managing costs with smaller margins and inflation. How do you balance that focus on customer experience with keeping investors happy?
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Simon Roberts11:26
It's the key question. Customers judge us every day, and we employ nearly 150,000 colleagues. We pay leading rates, so we have to find efficiencies. Over three years, we saved £1.3 billion and reinvested it into lower prices and pay. We had to make hard choices, like removing counters that weren't working for customers or the Argos catalog in a digital world. It's about constantly being investigative and finding productivity improvements.
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Host14:36
They may seem small individually, but it's constantly filtering across the business. You're forensic about finding savings while balancing customer needs.
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Simon Roberts15:01
Exactly. More and more, to serve customers and find efficiencies, you have to work end-to-end. That requires leaders to think beyond their part of the jigsaw. We work hard to drive that culture.
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Host17:20
I can't get through a conversation without talking about AI. We're big fans of technology for efficiencies, but deployment is important. How are you looking at AI?
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Simon Roberts18:03
AI presents real opportunity, but we start with bringing people and technology together. We've automated supply chain forecasting across the UK, improving availability and reducing food waste. We also use AI for personalized prices through Nectar, with 9.5 million permutations. Store managers now use AI tools to free up time for customers.
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Host21:48
What strikes me is how you use data for predictions, like weather affecting stock. AI will shift our ability to analyze complex information.
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Simon Roberts22:29
Absolutely. We also need to support farmers with data and AI to help them with volumes and sustainability. We're thinking at a system level.
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Host23:32
Hot topic: self-checkout. You get lots of feedback. How do you handle that?
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Simon Roberts23:45
It's a real challenge. Self-checkout saves time, and 65% of customers use it. Customer satisfaction is high, but we're committed to offering choice. We're trialing different setups, including traditional checkouts. We're also working on sustainability, reducing plastic and packaging. For example, we changed the packaging on our mince, which was a big decision. We learned from customer feedback and improved it.
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Host27:07
Change is hard. You're visible as CEO and explain reasons. How do you take customers with you when making changes?
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Simon Roberts27:51
We always start by saying we can do better. We learn from customers every day. On the mince packaging, we communicated and then improved. Our team reviews customer satisfaction weekly. It's about listening and adjusting.
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Host29:40
Upskilling and professionalization of customer service is dear to the Institute. How can we ensure customer service professionals are respected and have careers?
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Simon Roberts30:41
It's not just about pay, but paying fairly is important. We also need two-way communication, listening to colleagues, and investment in skills. With the new government, we need a focus on apprenticeship Levy to support training. Customer service is a critical part of the UK economy, and we must create real platforms for investment.
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Host34:43
There's a tension between short-term returns and long-term sustainability. How can we encourage longer-term thinking?
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Simon Roberts35:11
It's the key question. Being purpose-driven helps. For example, we now agree contracts with suppliers for 7-10 years instead of one year. That builds trust and allows them to invest in sustainable production. It's about leaning in together.