Sir Peter Davis, group chief executive of the UK’s second largest supermarket group, Sainsbury, took industry colleagues by surprise yesterday [Tuesday]. On his recent return to the group after an absence of fifteen years, Davis said that that the information and communications systems in place at the group were often more of a hindrance than a help.
Speaking at the annual convention of the Institute of Grocery Distribution, Davis referred to the mass of new technology that has arrived on the scene during his fifteen year absence. Technological advances such as cross-decking, scanning, Just In Time processes and streamlined replenishment had made the ITC arena extremely complex, he said.
While Davis and his team have implemented a number of initiatives themselves, he called in Andersen Consulting to overhaul the ITC infrastructure at Sainsbury, as he saw this as the quickest, most efficient way to solve the problems the group was experiencing in this area. He called on retailers to remember that the purpose of technology was to serve customers better, more cheaply and more quickly – it is not an end in itself, a fact some players tend to overlook.
Tribute to Tesco
Moving on to talk about home shopping, in a demonstration of generosity seldom seen between archrivals, Davis paid tribute to Tesco, which, he said, “saw an opportunity in e-commerce and went for it.” Sainsbury itself operates a fledgling home shopping offering, largely based on dedicated picking centres, although it is currently introducing some store picking to complement this. Sector leader Tesco.Com, the undisputed European champion of home food shopping, uses store picking to serve its home shopping customers.
Davis also announced plans to merge tasteforlife.co.uk, a Sainsbury website, with simplyfood.co.uk, a website operated by Carlton TV.
Looking to the future, he added that it would take three years to make the changes necessary to improve performance significantly, but that the unforgiving stock market would be hungry for evidence of a turnaround by 18 months, so the group was channelling its energy into working hard and fast and making its progress visible.