November 6, 2024 • 41 mins
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.
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Episode Transcript
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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 businessleadership was some of the most knowledgeable on the subject.
Last time I had a fantastic discussion with the Financial Times Consumer Editor ClaireBarrett where we dissected the current state of customer service and indeed customer
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loyalty in the UK.
Now this week we have a very timely discussion indeed as we come into the so-called goldenquarter, the busiest period of retail overall and in particular for food retail.
And I am absolutely delighted to be joined this podcast with Simon Roberts, who is CEO ofSainsbury's.
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And he joins me today to discuss the challenges facing food retailers and what businessleaders in this space should be focusing on as competition ever grows.
to ensure that we can start to really grow the UK economy.
I thoroughly enjoyed this conversation and I've had the privilege and pleasure of knowingSimon for quite a long time.
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And he really, really will show you the importance of customer experience, employeeengagement and financial results.
So I really hope you enjoy it too.
So it's a real privilege today to be joined for this week's podcast by Simon Roberts, whois CEO of Sainsbury's.
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Now, I have had the privilege and it is a privilege of knowing Simon now for a number ofyears.
And what can I say about him?
I think that probably the best way to describe Simon is that not only is a brilliantstrategist, but he really understands how you deliver operational excellence from a
customer service lens.
and he does all of that with great humility.
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So I'm really, really pleased that he's taken the time as a very busy man to be with us toreally kind of shine a bit of a spotlight onto how he is delivering brilliant and his
teams are delivering brilliant customer experience within the Sainsbury's.
So Simon, thank you genuinely for taking some time to be with us today.
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So Simon, maybe we can start by just talking a little bit about Sainsbury's and
How long have you been CEO now at Science for three years?
That's actually four and half years.
Five and a half.
Yeah, I says how fast it actually does go so one of the sorts of kind of things thatyou're working on at the moment And you know, you're very famously been talking about your
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strategy.
So let's talk a little bit about that and where you're taking that
Yeah, no for sure.
I mean, the first thing is Sanctus, which it's been around for over 150 years.
So, you know, the thing that's...
really important for us is to make sure that we do the best job we can for our customersin food, because that's what our history is all about and that's what customers expect of
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us.
So, you know, I think in the last few years, we've been really thinking about what is itgoing to take to make sure that more customers think of Saint-Pierre's as their first
choice of food.
And, but I think that it's really interesting when we think about what's going on in theminds of customers every day is, you know, some things in the last decade or so have
changed beyond any
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possible imagination we could have had about how customer attitudes and behaviours wouldhave changed, but actually somethings haven't changed at all.
And in the sector that I'm in, in food grocery,
And it's really three or four things that just really matter for customers all the time.
Obviously, we all shop for food, you every day, every week, and the price of our foodsreally, really matters.
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Secondly, nothing's more frustrating as it if you want to put a meal together or get yourgroceries in, than making sure everything's in stock.
You know, one of the biggest things that we have to make sure we get better and better onis that we've always got things that customers want to buy.
And then think the other thing that's really come through in the last few years,
is actually people want to try new types of food.
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And whether that be because it's somebody in the family that has different dietary needs,they want to buy gluten-free products or dairy-free products or the fact that actually
most of us rely on four or five meals that we cook all the time.
And so people want to try new things.
So the combination of price and availability and new food ideas are kind of where a lot ofour energy is down in the payment.
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And then the other really big obvious point is that we're in a really competitive industryand not to be complaining about that because I competition is really good.
In the UK, we have lots of really successful grocery companies who all compete very wellwith their competitors.
But we have to recognize the fact that we've got to become more efficient as well whilstmaking sure customers get a really good service.
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And that's one of the tensions and challenges we're trying to deal with at the moment.
So on that some recently you were talking about You know, used to say when we won't goshopping one particular supermarket then go shop for something else over here and some
there over there It's been a bit of a change hasn't there the fact that actually perhapswere a bit more loyal now or going to go to a one-stop shop Do you think that's because of
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thinking a bit beyond not just pricing but as you've said trying to think about the wholecustomer journey and trying to Ensure that there's something for everyone in your offer
Yeah, that's a really good question.
And I think that, you know, one of the things that we would observe is as we come througha pandemic, and then clearly through a major inflation crisis, that's caused customers,
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households, families to really challenge how they shop.
you know, clearly, you know, in food and grocery, we see that very regularly every week.
And so what are the things that we're seeing happening?
Well, I think for any of us that are on the tube or trying into London now, what's thebiggest thing that's happening?
Everyone's back in the office.
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In fact, I think it's interesting just this week to see Amazon have just said to all oftheir colleagues back in the office in five days a week, so it's in a very big shift in
working patterns.
By the I'm a big fan of smart, flexible work, so that's not necessarily where everyonemight go.
But the point I'm making is that people are busier again.
Yes.
They're back in the office, and so perhaps I've got less time to visit lots of differentshops.
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Exactly right.
So what we're seeing is customers saying, can I come into a store and get everything Ineed for my family?
The second thing I think we've seen, particularly after the inflation crisis that we'vehad, is that many more of us are eating at home more rather than eating out.
Now, the reasons for that, are just the cost of eating out as being one of the biggestareas of inflation.
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And so we're seeing a lot more desire to try new things at home, to cook more at home.
And so that's one of the reasons why I think for supermarkets that have a big range,they're becoming the place that customers want to go more often for those reasons.
And then the last thing we've seen quite recently actually is a lift to getting onlineshopping, which I think is also part of this trend of being busier again, back in the
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office, maybe at home less, and therefore the convenience of shopping online.
And also, back to your point about looking for more interesting food, maybe, and morediverse, and our population is more diverse.
So the ability to be able to serve it.
That sounds like a pretty tough gig, right?
Because you're going to be really driving that price.
You've got to be able to give all sorts of different kind of offers.
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So how do you differentiate?
What for you makes Sainsbury's stand outside?
What would be famous?
Hold on.
Well, I mean, think we should always be really honest with ourselves, right?
In the grocery industry, most investors do a lot of things in quite a way, right?
So I think that's an important start point.
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What is important to us as a team at Sankt Beres?
Well, for 150 years, actually, quality has always been a really key foundation of whycustomers will shop at Sankt Beres.
And as we've been working out how we encourage more customers to come back to us, one ofthe things that is so important is that
We don't put that in jeopardy at all.
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And so what we've been working on is how do we make lots of savings across the company sothat we can reinvest those savings in being better value for money.
And if I was to say to you four or five years ago, there was quite a gap between us andsome of our direct competitors.
And now we are the best value we've been, probably in a decade plus.
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And as a result of that, we're seeing a big shift in customers coming back to the bigweekly trolley shop because the value is better, which we've been working on, but also to
your point, because you can get everything you need in the store.
have about 30,000 food products in our stores and that's what customers want to buy.
If you think about some of the other supermarkets that maybe are smaller or...
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they're focusing on certain position in the market, they have a lot less products in theirstores.
And so our quality and our assortment but also our value are the things that we're reallytrying to differentiate on.
And one of the things that I really love about what our team are doing, we're introducingabout 1,500 new products every year.
So we have a team of people that are spending lots of time on farms or in factories or indevelopment of kitchens, thinking up new ideas for food.
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And particularly, as I said,
Earlier, people have wanted to eat different types of products or try new things.
Innovation is a massive theme at the moment.
And in fact, as we come into the run up to Christmas, there's going to be more newproducts this year than at any point in recent years.
That's what I'm about.
exciting.
any sneak previews?
mean gosh there are so many things but I think we have a big kind of event when we get allthe press and media to come in and you know there's lots of really good treat items this
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Christmas if you're having like every one round for special occasion.
Gagging Pie actually apparently this year is to be a really big hit for us and you knowlots and lots of new snacking, parcel foods and all these things so all things that are
going to be special to celebrate with.
We'll certainly look forward to that Simon definitely.
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I have some face.
Maybe we have to come for a tasting or something like that.
That would be a really great thing.
So one of the things we were talking about, and you mentioned innovation and also there'sa couple of things in here.
So you talked about innovation, but you also talked about the tension between being ableto deliver that brilliant service experience and managing the cost of the business when
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you are making smaller margins and all of the pressure and inflation, wage inflation, allof the things that we have seen.
As I said, had the privilege of working with you for a number of years and I know youreally care deeply about the customer experience.
So how come you've managed to achieve that when maybe some organizations both inside yoursector and outside of the sector haven't?
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So how do you balance that focus on the delivery of all the things you've talked aboutpassionately, but also quite frankly, making sure your bottom line and your investors are
still happy with
It's the key question is as you say we have many different stakeholders who will judgeultimately Whether we're doing a good nut job or not and as you just said, know clearly
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customers judge us every day You know, we should make no mistake under no illusion thatcustomers in grocery move between different brands very readily Yeah, know for customers
to come into our store today and not be happy with our value For example very quickly theymove somewhere else so customers judges every day we employ
150,000 colleagues.
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Yeah.
They do an amazing job looking after our customers, but we've got to make sure we've gotthe best colleagues in the industry.
You can serve customers really well.
For that reason, we pay a leading rate to pay in the market, which means to your point, weinvest to make sure.
that we can do that, but we have to therefore find efficiencies to pay for that investmentbecause clearly our wages bill is our most expensive cost in the company.
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That's gone up about 10 % in the last year, for example, growth is at 10%.
So we have to find efficiencies to offset that.
And obviously shareholders, as you say, we want to see a return on their investment.
So efficiency in our sector is an absolute first priority.
And, you know, not surprisingly, a lot of efficiencies have been found over the decadesbefore.
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So there wasn't that much low hanging kind of opportunity to get after.
So we have to be really, really bold and actually really creative about some of the thingsthat we look to do.
And this thing is never about a single idea or a sort of bullet that solves it.
This is always about
lots and lots of activity.
So we've just come off back at our first three year kind of focus on this and we saved 1.3billion pounds of costs.
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in our company, which we reinvested back into lower prices and into paying our colleaguesmore.
And it meant we had to make some hard choices.
to your question on attention, we used to have lots of counters in our stores where you'dbe able to go to the counter and get a product from behind the counter.
actually, when we looked at that part of how customers were shopping, it just wasn'tworking for customers.
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We were getting a lot of food waste.
It was costing a lot to run them.
And so it's a good example of something that lots of people
nostalgic about, but it actually wasn't delivery, a point of difference that we couldjustify anymore.
In our company, had a lot of examples where we were spending money on things that customdidn't really value.
And so we had to be pretty clear about what would continue and what wouldn't.
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And examples of that would be, we have Argos within our company.
Everyone will remember that there used to be a famous Argos head slot.
it was very popular.
But actually what we found was, in an internet-driven world, would not even know and useit, but the prices and the content was always day after day.
So you're printing something.
that's a thousand pages long actually for something that was no longer going to be exactlyon the latest news.
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So they're these samples of the things we had to check.
And some of those are lots of so your point is is finding and being investigative all thetime.
Yeah, all these you know, yeah And they may seem small yeah as individual pieces, butthat's how you're constantly filtering across the business.
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How can we do that?
So how do you, I honestly, this is a really tough challenge for our teams all the time.
How do we be just more productive?
So how do we move stock from aim to be more effectively?
If you think about it, our company, we're moving every week tens of millions of cases offood.
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And every single case takes a minutes to move there.
packaging.
so every single thing we do, we're doing a very big piece of work at the moment, lookingat the moment, a product leaves the supplier.
and comes to the the depot and comes to the store and goes into the back of the store andgoes to the shelf and ultimately goes into the customer's bar skill trolley how do we find
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efficiencies all the way through that chain?
Because I think it's a really important point because what you've talked about is thewhole customer journey and you've talked about from the supplier all the way through to
every single stage and looking for not just efficiency savings but the most effective wayof doing that and maybe the most effective way of doing that for your colleagues as well
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as your customers as well as your investors and that's what really strikes me as somethingthat's slightly different because you are forensic about that it's not about being soft
about any of this you have to find those savings
but you do it with a lens which is like you're constantly balancing things.
If we take that too far, then you risk, you know, alienating a large group of customers.
the right.
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I mean, one of the things maybe just, you as you described that, Jo, is that we've allworked in organizations that are made up of functions.
Silence.
This part of you know, finance or commercial or retail, and actually more and more toserve customers and find these efficiencies, you have to work end to end.
Which actually is a big ask of, you know, an organization to work very differently.
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And actually of us all as leaders as well, because you can't be just focused on your part.
off the jigsaw, you've got to think about the whole system.
So you need to attract probably quite selfless people too, because we're not going to havefiefdoms or little pieces anymore.
we have to drive that culture across the whole of the organisation.
And I know you lead in that, Simon.
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You're very visible in your stores.
You're very visible in getting out with your deliveries.
And those are really important, I think, messages from a leadership point of view thatyou're prepared to get your hands dirty and you really understand.
You have to know and feel it, don't you?
I always remember at one of our board meetings, I think you were in a basically a verysmall room cupboard at the back of an office of a shop one time.
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So I can definitely testify to you living there and really driving that.
OK, I can't get through any conversation at the moment.
I want to come on to the innovation bit that we haven't picked up quite so much withouttalking about AI.
Yeah.
Where, you know, where this big thing is going to kind of take us and this balance.
And I've got a bit of a theory at the moment, Simon, because I mean, we've talked a littlebit.
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before about service with respect and this massive rise of abusive behavior and thisdehumanization.
Now, at the institute, we're big fans of AI and technology in terms of being able to drivegreater efficiencies, but it's its deployment that's going to be really important as far
as workers' services.
How are you, I guess, looking at technology and particular AI, and where do you see thatgoing in the next five years?
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Such an important question, Joanne.
I think that, you know, we've already touched on this, but, as we think about how do weserve customers better and also become a lot more efficient, know, AI definitely presents,
you know, real opportunity to do that.
But I think we have to start with a really important principle, which is about how youbring people and technology together.
Yes.
It's not one or the other.
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It's a really conscious set of choices about where does having the best people and thebest, you know, human interaction will really drive this thing?
sickness.
really count.
Absolutely.
And then where does technology and automation enable you to support your team, be betterfor customers?
And that's the way we think about it.
some of the things that we're doing in the automation AI space at the moment, which issignificant.
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we've just automated all of our supply chain forecasting in food across the UK.
Why is that really important?
It's really important because clearly in a food business, it's something you do every day.
First of all, it's a task that you repeat millions
of times over.
If you think about 30,000 products and we have about 1500 stores, a few less than that,but you get the volume of decisions you happen to make about how much of every product was
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sent into every store at every point of time.
So we've just put an AI capability to do that in our company and it's been a fantasticchange because we've learned so much, right?
And the team that have led it have done an amazing job.
because we've never done that before.
And so what have we learned?
We've learned first of all that we can actually get better availability to customers, backto what we said earlier.
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Our availability's lifted three points since we got it in place, offered already a prettychallenging kind of number.
So we're really seeing better availability, firstly.
And that's not just in the morning at nine o'clock or 10 o'clock, but that's in theevening where previously we weren't always as good.
Secondly, we're seeing less food waste.
because we're getting more accurate on what we're sending to our stores at a given pointin time.
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But actually really importantly, and you know, if no space, I don't know, 24, 25 degreesoutside in, you know, middle of September today.
So what we find is that, you know, the UK isn't the same from the weather or differentconditions point of view.
And that drives a lot of different behaviors and customers as to what they buy.
There's been weekends this summer when there's been a 15 degree difference between theNorth and the South.
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So you need different products in different availabilities in different parts of thecountry.
So that would be an example of how we're using AI in the supply chain.
And then maybe another one which is super interesting is that customers more and more arelooking for personalized value.
And without this being in any way too much of a plug for Nectar, what you can do when youshop at Sainsbury's and you've got Nectar on your phone, every week, the day before we do
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our biggest shop.
and will be set at bunch of personalized prices.
there are about 95 million permutations at different personalized prices at any point intime, because what will be personalized for you, Joe, or David, Willis, or me, will be
different.
And so we're using that algorithm, that AI capability to calculate that.
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So serve up that personalized price.
So let me talk with examples of things that are happening at scale.
And then in a really much smaller way, thinking about
All of our store managers are now using Codequilot.
So if you think a store manager's time is really valuable, so if they can get someAI-capable teams that are using their technology and their reporting, it saves them loads
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of time.
Because if we can free up 20 % of our store managers' time to be with their colleagues andtheir customers, then that would be great.
Hopefully.
Okay so some really good examples and what strikes me there is about how you're using italso to really for predictions to bring in different data sets.
when you're talking about the weather I was thinking about you know be able to predict in10 days time what kind of food stocks you might match in the weather's going to be doing
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whatever it's going to be doing but it's also interesting how you're using data.
And for a long time, data has always been absolutely critical, but we've never been ableto really analyze it or get it.
It's just too complex.
There's too much of it.
And I guess AI, because of the sheer computing power of that, is going to really shift ourability to get through quite a lot of information about customers.
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Totally right and maybe just you know just one line to add to that you know one of thethings in this in the UK we have to think about is how do we support our farmers to grow
enough food at the right place.
Farming is a very tough industry actually.
I know you're really big on this Simon, in terms of welfare.
Well, there's definitely welfare and support for all of the food that gets produced in theUK, but also helping farmers with AI and data to have better insight on the volume that
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they need to prepare for.
So I think more and more with AI, we've got to think at the system level.
What's the customer outcome that's expected or differentiating?
And then how do you organise every part of system towards that?
And I think again that that this really was starting before about the connectivity and ina world now which was so much more connected really looking at the different impacts of
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all aspects Fascinating and really interesting and we're definitely gonna get ourselves toyour store because I know you've got an innovation store
Yeah, I I just look maybe some of the other tensions that we should talk about, know,because, you know, a of hot topics definitely in our industry is how customers want to
check out and
Yeah, self-serve
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Lots of feedback on that Joe, know, look, yeah, it's a real challenge for us, right?
Because that's the point I made earlier, you know.
In some ways it's, you know, it's kind of pretty irrational, isn't it?
If I could say it that way, that you'd go into a supermarket, you'd take the trolley,you'd fill it all up, and then you'd get to the traditional checkout as well.
Then you take it all out again, and then you put it all back in again.
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So there's a reason that we were trying to save customers time because actually time is areally big deal when you're under pressure.
lots of customers actually like self checkouts and about 65 % of all of our customers usea self checkout.
And just to assure you, because I this will be really important to you, we measure reallycarefully what the customer satisfaction is on our different methods of pavement and when
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it's not good enough we work to improve it.
But actually self-checkout customer satisfaction is one of the highest in the store.
But there's lots of customers, I you're telling me you want to use a traditional...
You know.
Well certainly want to have choice.
I think choice has been probably at different times.
It might not be.
So our absolute commitment is however you want to play, you can play.
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Now, if you're in one of our supermarkets, because you're very keen early bird at seven inthe morning and there's no one else there or eight at night and the checkout isn't open,
we'll open it for you.
But coming back to the test store that we were describing, we were trying new waves ofcustomers checking out.
And there's quite a lot happening in this area at the moment.
know, so I think when you look around the world, everyone's trying to solve how to helpcustomers with a big, troggy checkout more efficiently.
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I think technology will play a really big role here.
But also sometimes just giving customers choice back, as you say.
So we're trying.
different types of checkouts where customers can, if they want to use an old, long,traditional type of checkout, we'll let them do that.
We've put some on where they can scan it themselves.
There's more space to do that because quite often customers like to have just less time,pressure, and more space.
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We're also using what we call Smart Shop, which means that you can scan as you go aroundthe store.
When you do that, that also means that you can get lots of extra value and prices.
So we're trying lots in checkouts.
That's quite interesting.
We're also trying lots of things on sustainability as well.
with this, you know, in a supermarket we use lots of electricity, we crave lots of carbonand so we think about all the refrigeration, all the space we have to make it as efficient
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as possible in that.
too.
mean I know that they were very big about you know shrink wrapping and getting rid of someof those kind of points.
It's just the right thing to do.
Obviously you've got to have packaging where products are to get damaged on their way intothe store.
So there's lots of things where you have to put some kind of packaging on products.
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we've done lots and lots and lots to take a lot of plastic out or replace plastic withalternatives.
It spats the tension.
I remember about a year and a bit ago we made a very big decision to challenge thepackaging on some of our mints.
I know it well yes absolutely
example, right?
It's one of the highest volume products in our whole range.
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5 % to 12 % meant very popular volume product.
It came in a big tray and it's lots of in there.
So we have a plastic in our packaging, lots of customer feedback, lots of pretty areas ofcustomer feedback.
But in the end, when you cook it, it's the same.
I was going to ask about that because, you know, this is about change too.
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And as human beings, some of us are better at change than others and the speed of change.
So when you're trying to put some of those things in, know, one thing I would say, Simon,is you're very visible as a chief exec.
You write to your customers, you explain why we are doing things.
And, you know, 18 months on,
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probably most of us have got used to the fact that, as you said, it's the same meat, it'sthe same packaging.
But, you know, what would you be saying to this audience around how you help take yourcustomers sometimes with you?
Because it might be a very good reason to do that, and it's no different, but you've stillgot to sell that idea in, haven't you?
Yeah, there you have
And I think you've always got to start with we can always do this better.
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You know, because at the end of the day, the only group of people that can decide whetherwe've done things right or to their expectations are our customers.
And so, you know, I definitely wouldn't start from a point of view of, you know,everything we did on that we got perfectly right.
I think we learned a huge amount through that process about how we could have communicatedeven more clearly, how we could have made sure on the path it was really clear.
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You know, it was a good example.
of the big idea was clear, but how do we keep making sure we learn how we do it?
And I think that the job for all of us leaders or boys in any customer service industry isevery day, every single day, you learn a lot about what you can do better.
I'm very, very lucky in the world that I do, because every evening I get lots and lots ofcustomers write to me.
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There's a sort of time of the day where people get home from work or they've the tea forthe family and I think right now,
had us time to talk about the things that you could have done better.
And so, you know, that's an example of what we did with big change.
There's lots of others, but my key point here would be you learn a lot from listening tocustomers as you make those changes.
Yeah.
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You adjust when you need to.
and the packaging, went back and improved it in that example.
And then lots and lots of things.
mean, the way our team worked in Sainsbury's, they do amazing jobs.
Every single week, we have obviously a meeting to review how we've done.
And the first thing we talk about is what was our customer satisfaction in the week beforein every single dimension of what we did.
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And if something moved, we really understand what caused it to move.
Yeah, and it may mean that you don't change something as a result of that, but literallyyou understand.
So this whole point of about seeking to understand.
So I'm going to talk a little bit about up-skilling.
professionalisation of customer service.
You know that this is something that's very dear to the Institute in terms of being ableto attract more people into the industry, 60 % of our workforce work in customer related
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roles.
But not just to see it as something that I do for short time, but the skill sets thatwe're now looking for in customer service professionals are much more complex, for
example, than perhaps they were 10 years ago.
So
We were talking before about we are seeing a bit of a challenge at the moment because somepeople are leaving customer service because they're not feeling perhaps as loved by
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organisations as they should do or as invested in that.
You made a comment earlier about your people being king and you pay them a good wage interms of connection.
But what about development and how can we ensure not just in retail but in the wider spacethat customer service professionals
a bit more respected and that we can see there's a proper career for
(30:40):
That's brilliant question and one that we've all got to be really caring about, Because asyou say, so much of our economy is driven by really dedicated people providing the service
every day.
And if we don't get the balance of skills right, and also the diversity of skills right aswell, then there's an economic downside to that situation.
(31:01):
So I think that it's just in terms of the way we can fight it, it's not just about pay.
And I want to really make that point.
But I think it's an important principle
not to step over.
And so our start point is that we work in a competitive industry, you know, we have tomake sure that we're very attractive as a place to work.
fair.
Definitely fair, but also if you want to work in this industry, it's hard work.
(31:24):
know, thousands of our people this morning would have been up at three o'clock heading tothe store, filling up the store, baking bread, picking online products.
It's hard.
It's a hard job.
so making sure we prioritize paying our colleagues fairly, but a leading rate in themarket is very important to us, alongside all the other things that need to go into
(31:47):
providing a great custom service.
So what does that look like?
First of all, just as we don't always get everything right for our customers, we don'talways get everything right for our colleagues.
You've got to listen, haven't you?
You've got to really dialed in, and any of our leaders in our company do this.
So we do lots of listening with our colleagues.
Every month, for example, a bit like we're doing now, we have just a really open callwhere any one of our team can dial in and ask me anything they want to talk about.
(32:13):
Because one of the things about, I think, a customer environment is it's very intense, andyou need to wait also as a colleague.
or a member of team to share in our flow what's happening in your part of business.
So two-way communication, listening, really understanding what's really going on.
Our people in each part of this is a really important part that as well.
And I think that's part of building a professional respect for the role that everybody,plays.
(32:40):
Exactly, And then I think that, you know, one of the big things we need to see as we allwork with this new government to help shape their agenda
you
is we need a real focus, don't we, on skills and capabilities.
I think, I'm sure it's something you're on, Jo, it's on the mind of many businesses.
It's good to see the early signs of the shift on the apprenticeship levy, that's good.
(33:03):
But it's still a long way to go.
We need to create a real platform for businesses to prioritise investment and training andskills.
And particularly in silivics, because that really requires a long-term, sustained effortand policy
needs to help.
So I think it's a combination of looking after the priorities that people feel fairly andwell rewarded and engaged, making sure you really understand what's going on in support of
(33:34):
people serving and looking after customers every day and where things aren't right,adjusting things accordingly.
And then thirdly, creating a real investment around capability and skills in customerservice because it's such a critical part of what we do every day.
and on the wider scale and therefore the policy and what we're asking of government.
And I know that you are particularly championing the apprenticeship now, because you knowthat the Institute is also...
(34:00):
It's brilliant the work industry that we've been on this and you know I think there's justbeen so much wasted money actually that could have gone into great training and look one
of the things you know we would say is just to make sure we use every single pound of thatlevy to help improve skills.
Totally.
And you mentioned obviously having a new government forming that.
(34:23):
The UK is not without its challenges at the moment and we don't live in an isolatedbubble, do we?
The whole world has got significant challenges.
But I do think this is a huge opportunity to really raise the profile and the impact thatcustomer service can have to a business.
And I know that that's something that you feel very strongly about as well.
There's one bit just to that, about how we try and help organisations, maybe, andbusinesses to be less short-term in our thinking and not longer-term.
(34:52):
And that is another tension, isn't it?
Because every week you're having to return to the shareholder and that whole kind ofpiece.
But any thoughts on that we can try and encourage us to be thinking further out, becausesurely that is the only way that we're going to be able to sustain our businesses.
Yeah.
Look, I think it's a key question, isn't it?
(35:13):
Which is, is what I'm doing today leading to long term?
Yes.
How we create, you know, better outcomes for customers, improve value for stakeholders andthe more sustainable way of doing things.
And it's quite hard when you're dealing with short term challenges to always make sureit's connecting into that long term picture, it?
Which is why, you know, one of the things that I would say in our organisation we've beenreally working on is what does it take to become really purpose driven?
(35:40):
Yes, I don't say that as kind of grand, you know phrase well reason I say it's because ifyou're really clear as a team as a business or where you want to get to with long term it
really helps then sort out some of the choices closer to now which
you need to make yes or no decisions on and maybe just a couple of examples of the sort ofthings it's helped us with.
(36:04):
So you ask about long-term thinking, as I was describing, we work obviously in the UK foodspace.
And we've got a real challenge in the UK about our resilience of the food we produce here.
I mentioned it earlier on.
So one of the things that has been quite different that we've been working on is that wewould have agreed with our suppliers contracts for a year, 18 months, and then we'd come
(36:28):
back and renegotiate those.
And in lots of our fresh food categories, we're now agreeing contracts over seven and 10years.
Why is that really important?
Well, it's really important because if I'm producing fresh vegetables,
that's your question on automation.
It's very hard to go and commit to big investment in capital infrastructure to pickvegetables in that case unless you're really sure that you've got a long-term volume
(36:56):
commitment.
so, actually this morning just went out without key produce suppliers together and we weretalking about exactly this point.
If you're going to produce more sustainably with less impact on the environment, then
same rules apply.
There's a lot of our work in our business about helping suppliers have more confidence andthen the other point is that if you think in longer time frames trust is just much higher
(37:23):
isn't it because we're not sitting opposite each other across the table once a year.
So you know I think it's a good opportunity just to kind of reset the rules of partnershipand when you do that you know I always think about you know when you're leaning in at kind
of 45 degrees each
you know, no one can fall over.
(37:44):
So you're building trust, you're creating a longer term picture and you're linking it toreally where you want to get to.
So something we really passionately believe in and it's true with our suppliers, it's truewith partners, it's true with our colleagues.
We don't always get these things right, but how do we think longer term?
I love that phrase about the fact you're all leaning in.
And I know that you're really big on that, Simon, about leaning in together to resolvethat particular issue.
(38:08):
And it does feel much more than like it is a partnership and it does feel that everyonehas a place to play in that piece.
Simon, I know you've been very generous with your time, so I don't want to take too muchmore of it.
But I suppose my final question really would be, is, you you...
not only are you CEO of Sainsbury's, but you do lots of other things in terms of trying tohelp business to be perceived well.
(38:34):
You mentioned about reputation and trust.
So if you could ask for one thing, Simon, in terms of the UK and perhaps to narrow it downa little bit more on the service agenda, what would you encourage other CEOs perhaps in
industry sectors that maybe are not perhaps?
as focused as you might be on what we've been talking about this afternoon, why theyshould do that and what would you like them to do more?
(39:01):
Well, I'm not, I'm an optimist and I see in here we'd have the privilege to meet lots ofleaders and different stakeholders.
And I actually think there's quite a big seat change on the way at the moment.
Because actually competition and the level of change means there's no option actually, ifyou want to have a successful business outcome to get closer to customers.
(39:25):
one of the things I would observe in our industry and the one I'm part of, is that it'sreally
intensely competitive, but quite a lot of topics pre-competitively, we're working actuallyquite closely together, right?
And sustaining this is a good example of that.
So I think, you know, I think at the kind of system level, there's good evidence actuallyof business working differently.
(39:48):
In the end, I mean, there's only two things I think that really sort of differentiatebusinesses that are really focused on customers to your question, and maybe those that
could be more so, and that is being really close to a customer.
of thinking and feeling all the time, isn't it?
Because that really does tell you to what extent you're meeting your long-term commitmenthere and now.
(40:11):
And I think one of the things that's quite encouraging in a lot of leaders I've privilegedto spend time with is that lots of people spend more time, and VAMU spends more time doing
that, and that the work of the Institute in that area is really good.
And I think we've got a massive opportunity, actually, to work with this new government.
to link their key objective growth with the difference that customer service can make togrowth.
(40:36):
There's such a hard wire there that I think now is the time to really amplify.
Yeah, I'm pushed on that.
know, as all of the work on the return on investment-making service and skills andcapabilities in automation as we've talked today, I think we have to make it really clear,
you know, how that links to growth.
(40:57):
And if that is clear, then policies will flow from that and expectations will rise, whichis what we need to see.
Simon, thank you so much for spending your time with us this afternoon.
I really, really appreciate it.
Thank you, Simon.
I hope you enjoyed that conversation with Simon as much as I did.
It is absolutely a pleasure to be able to spend time with business leaders, understandingabout what keeps them awake at night when it comes to service, business and the wider
(41:26):
economy, and more importantly, what they're doing about it.
So join me next time for a slightly different, but no less interesting conversation.
with economist Simon French.
Until then, do take care.
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 businessleadership was some of the most knowledgeable on the subject.
Last time I had a fantastic discussion with the Financial Times Consumer Editor ClaireBarrett where we dissected the current state of customer service and indeed customer
(00:30):
loyalty in the UK.
Now this week we have a very timely discussion indeed as we come into the so-called goldenquarter, the busiest period of retail overall and in particular for food retail.
And I am absolutely delighted to be joined this podcast with Simon Roberts, who is CEO ofSainsbury's.
(00:52):
And he joins me today to discuss the challenges facing food retailers and what businessleaders in this space should be focusing on as competition ever grows.
to ensure that we can start to really grow the UK economy.
I thoroughly enjoyed this conversation and I've had the privilege and pleasure of knowingSimon for quite a long time.
(01:14):
And he really, really will show you the importance of customer experience, employeeengagement and financial results.
So I really hope you enjoy it too.
So it's a real privilege today to be joined for this week's podcast by Simon Roberts, whois CEO of Sainsbury's.
(01:38):
Now, I have had the privilege and it is a privilege of knowing Simon now for a number ofyears.
And what can I say about him?
I think that probably the best way to describe Simon is that not only is a brilliantstrategist, but he really understands how you deliver operational excellence from a
customer service lens.
and he does all of that with great humility.
(02:00):
So I'm really, really pleased that he's taken the time as a very busy man to be with us toreally kind of shine a bit of a spotlight onto how he is delivering brilliant and his
teams are delivering brilliant customer experience within the Sainsbury's.
So Simon, thank you genuinely for taking some time to be with us today.
(02:20):
So Simon, maybe we can start by just talking a little bit about Sainsbury's and
How long have you been CEO now at Science for three years?
That's actually four and half years.
Five and a half.
Yeah, I says how fast it actually does go so one of the sorts of kind of things thatyou're working on at the moment And you know, you're very famously been talking about your
(02:41):
strategy.
So let's talk a little bit about that and where you're taking that
Yeah, no for sure.
I mean, the first thing is Sanctus, which it's been around for over 150 years.
So, you know, the thing that's...
really important for us is to make sure that we do the best job we can for our customersin food, because that's what our history is all about and that's what customers expect of
(03:01):
us.
So, you know, I think in the last few years, we've been really thinking about what is itgoing to take to make sure that more customers think of Saint-Pierre's as their first
choice of food.
And, but I think that it's really interesting when we think about what's going on in theminds of customers every day is, you know, some things in the last decade or so have
changed beyond any
(03:22):
possible imagination we could have had about how customer attitudes and behaviours wouldhave changed, but actually somethings haven't changed at all.
And in the sector that I'm in, in food grocery,
And it's really three or four things that just really matter for customers all the time.
Obviously, we all shop for food, you every day, every week, and the price of our foodsreally, really matters.
(03:44):
Secondly, nothing's more frustrating as it if you want to put a meal together or get yourgroceries in, than making sure everything's in stock.
You know, one of the biggest things that we have to make sure we get better and better onis that we've always got things that customers want to buy.
And then think the other thing that's really come through in the last few years,
is actually people want to try new types of food.
(04:07):
And whether that be because it's somebody in the family that has different dietary needs,they want to buy gluten-free products or dairy-free products or the fact that actually
most of us rely on four or five meals that we cook all the time.
And so people want to try new things.
So the combination of price and availability and new food ideas are kind of where a lot ofour energy is down in the payment.
(04:31):
And then the other really big obvious point is that we're in a really competitive industryand not to be complaining about that because I competition is really good.
In the UK, we have lots of really successful grocery companies who all compete very wellwith their competitors.
But we have to recognize the fact that we've got to become more efficient as well whilstmaking sure customers get a really good service.
(04:56):
And that's one of the tensions and challenges we're trying to deal with at the moment.
So on that some recently you were talking about You know, used to say when we won't goshopping one particular supermarket then go shop for something else over here and some
there over there It's been a bit of a change hasn't there the fact that actually perhapswere a bit more loyal now or going to go to a one-stop shop Do you think that's because of
(05:19):
thinking a bit beyond not just pricing but as you've said trying to think about the wholecustomer journey and trying to Ensure that there's something for everyone in your offer
Yeah, that's a really good question.
And I think that, you know, one of the things that we would observe is as we come througha pandemic, and then clearly through a major inflation crisis, that's caused customers,
(05:44):
households, families to really challenge how they shop.
you know, clearly, you know, in food and grocery, we see that very regularly every week.
And so what are the things that we're seeing happening?
Well, I think for any of us that are on the tube or trying into London now, what's thebiggest thing that's happening?
Everyone's back in the office.
(06:05):
In fact, I think it's interesting just this week to see Amazon have just said to all oftheir colleagues back in the office in five days a week, so it's in a very big shift in
working patterns.
By the I'm a big fan of smart, flexible work, so that's not necessarily where everyonemight go.
But the point I'm making is that people are busier again.
Yes.
They're back in the office, and so perhaps I've got less time to visit lots of differentshops.
(06:31):
Exactly right.
So what we're seeing is customers saying, can I come into a store and get everything Ineed for my family?
The second thing I think we've seen, particularly after the inflation crisis that we'vehad, is that many more of us are eating at home more rather than eating out.
Now, the reasons for that, are just the cost of eating out as being one of the biggestareas of inflation.
(06:55):
And so we're seeing a lot more desire to try new things at home, to cook more at home.
And so that's one of the reasons why I think for supermarkets that have a big range,they're becoming the place that customers want to go more often for those reasons.
And then the last thing we've seen quite recently actually is a lift to getting onlineshopping, which I think is also part of this trend of being busier again, back in the
(07:19):
office, maybe at home less, and therefore the convenience of shopping online.
And also, back to your point about looking for more interesting food, maybe, and morediverse, and our population is more diverse.
So the ability to be able to serve it.
That sounds like a pretty tough gig, right?
Because you're going to be really driving that price.
You've got to be able to give all sorts of different kind of offers.
(07:42):
So how do you differentiate?
What for you makes Sainsbury's stand outside?
What would be famous?
Hold on.
Well, I mean, think we should always be really honest with ourselves, right?
In the grocery industry, most investors do a lot of things in quite a way, right?
So I think that's an important start point.
(08:03):
What is important to us as a team at Sankt Beres?
Well, for 150 years, actually, quality has always been a really key foundation of whycustomers will shop at Sankt Beres.
And as we've been working out how we encourage more customers to come back to us, one ofthe things that is so important is that
We don't put that in jeopardy at all.
(08:24):
And so what we've been working on is how do we make lots of savings across the company sothat we can reinvest those savings in being better value for money.
And if I was to say to you four or five years ago, there was quite a gap between us andsome of our direct competitors.
And now we are the best value we've been, probably in a decade plus.
(08:45):
And as a result of that, we're seeing a big shift in customers coming back to the bigweekly trolley shop because the value is better, which we've been working on, but also to
your point, because you can get everything you need in the store.
have about 30,000 food products in our stores and that's what customers want to buy.
If you think about some of the other supermarkets that maybe are smaller or...
(09:08):
they're focusing on certain position in the market, they have a lot less products in theirstores.
And so our quality and our assortment but also our value are the things that we're reallytrying to differentiate on.
And one of the things that I really love about what our team are doing, we're introducingabout 1,500 new products every year.
So we have a team of people that are spending lots of time on farms or in factories or indevelopment of kitchens, thinking up new ideas for food.
(09:36):
And particularly, as I said,
Earlier, people have wanted to eat different types of products or try new things.
Innovation is a massive theme at the moment.
And in fact, as we come into the run up to Christmas, there's going to be more newproducts this year than at any point in recent years.
That's what I'm about.
exciting.
any sneak previews?
mean gosh there are so many things but I think we have a big kind of event when we get allthe press and media to come in and you know there's lots of really good treat items this
(10:05):
Christmas if you're having like every one round for special occasion.
Gagging Pie actually apparently this year is to be a really big hit for us and you knowlots and lots of new snacking, parcel foods and all these things so all things that are
going to be special to celebrate with.
We'll certainly look forward to that Simon definitely.
(10:25):
I have some face.
Maybe we have to come for a tasting or something like that.
That would be a really great thing.
So one of the things we were talking about, and you mentioned innovation and also there'sa couple of things in here.
So you talked about innovation, but you also talked about the tension between being ableto deliver that brilliant service experience and managing the cost of the business when
(10:49):
you are making smaller margins and all of the pressure and inflation, wage inflation, allof the things that we have seen.
As I said, had the privilege of working with you for a number of years and I know youreally care deeply about the customer experience.
So how come you've managed to achieve that when maybe some organizations both inside yoursector and outside of the sector haven't?
(11:14):
So how do you balance that focus on the delivery of all the things you've talked aboutpassionately, but also quite frankly, making sure your bottom line and your investors are
still happy with
It's the key question is as you say we have many different stakeholders who will judgeultimately Whether we're doing a good nut job or not and as you just said, know clearly
(11:36):
customers judge us every day You know, we should make no mistake under no illusion thatcustomers in grocery move between different brands very readily Yeah, know for customers
to come into our store today and not be happy with our value For example very quickly theymove somewhere else so customers judges every day we employ
150,000 colleagues.
(11:57):
Yeah.
They do an amazing job looking after our customers, but we've got to make sure we've gotthe best colleagues in the industry.
You can serve customers really well.
For that reason, we pay a leading rate to pay in the market, which means to your point, weinvest to make sure.
that we can do that, but we have to therefore find efficiencies to pay for that investmentbecause clearly our wages bill is our most expensive cost in the company.
(12:20):
That's gone up about 10 % in the last year, for example, growth is at 10%.
So we have to find efficiencies to offset that.
And obviously shareholders, as you say, we want to see a return on their investment.
So efficiency in our sector is an absolute first priority.
And, you know, not surprisingly, a lot of efficiencies have been found over the decadesbefore.
(12:43):
So there wasn't that much low hanging kind of opportunity to get after.
So we have to be really, really bold and actually really creative about some of the thingsthat we look to do.
And this thing is never about a single idea or a sort of bullet that solves it.
This is always about
lots and lots of activity.
So we've just come off back at our first three year kind of focus on this and we saved 1.3billion pounds of costs.
(13:09):
in our company, which we reinvested back into lower prices and into paying our colleaguesmore.
And it meant we had to make some hard choices.
to your question on attention, we used to have lots of counters in our stores where you'dbe able to go to the counter and get a product from behind the counter.
actually, when we looked at that part of how customers were shopping, it just wasn'tworking for customers.
(13:32):
We were getting a lot of food waste.
It was costing a lot to run them.
And so it's a good example of something that lots of people
nostalgic about, but it actually wasn't delivery, a point of difference that we couldjustify anymore.
In our company, had a lot of examples where we were spending money on things that customdidn't really value.
And so we had to be pretty clear about what would continue and what wouldn't.
(13:56):
And examples of that would be, we have Argos within our company.
Everyone will remember that there used to be a famous Argos head slot.
it was very popular.
But actually what we found was, in an internet-driven world, would not even know and useit, but the prices and the content was always day after day.
So you're printing something.
that's a thousand pages long actually for something that was no longer going to be exactlyon the latest news.
(14:22):
So they're these samples of the things we had to check.
And some of those are lots of so your point is is finding and being investigative all thetime.
Yeah, all these you know, yeah And they may seem small yeah as individual pieces, butthat's how you're constantly filtering across the business.
(14:42):
How can we do that?
So how do you, I honestly, this is a really tough challenge for our teams all the time.
How do we be just more productive?
So how do we move stock from aim to be more effectively?
If you think about it, our company, we're moving every week tens of millions of cases offood.
(15:03):
And every single case takes a minutes to move there.
packaging.
so every single thing we do, we're doing a very big piece of work at the moment, lookingat the moment, a product leaves the supplier.
and comes to the the depot and comes to the store and goes into the back of the store andgoes to the shelf and ultimately goes into the customer's bar skill trolley how do we find
(15:24):
efficiencies all the way through that chain?
Because I think it's a really important point because what you've talked about is thewhole customer journey and you've talked about from the supplier all the way through to
every single stage and looking for not just efficiency savings but the most effective wayof doing that and maybe the most effective way of doing that for your colleagues as well
(15:45):
as your customers as well as your investors and that's what really strikes me as somethingthat's slightly different because you are forensic about that it's not about being soft
about any of this you have to find those savings
but you do it with a lens which is like you're constantly balancing things.
If we take that too far, then you risk, you know, alienating a large group of customers.
the right.
(16:05):
I mean, one of the things maybe just, you as you described that, Jo, is that we've allworked in organizations that are made up of functions.
Silence.
This part of you know, finance or commercial or retail, and actually more and more toserve customers and find these efficiencies, you have to work end to end.
Which actually is a big ask of, you know, an organization to work very differently.
(16:30):
And actually of us all as leaders as well, because you can't be just focused on your part.
off the jigsaw, you've got to think about the whole system.
So you need to attract probably quite selfless people too, because we're not going to havefiefdoms or little pieces anymore.
we have to drive that culture across the whole of the organisation.
And I know you lead in that, Simon.
(16:52):
You're very visible in your stores.
You're very visible in getting out with your deliveries.
And those are really important, I think, messages from a leadership point of view thatyou're prepared to get your hands dirty and you really understand.
You have to know and feel it, don't you?
I always remember at one of our board meetings, I think you were in a basically a verysmall room cupboard at the back of an office of a shop one time.
(17:15):
So I can definitely testify to you living there and really driving that.
OK, I can't get through any conversation at the moment.
I want to come on to the innovation bit that we haven't picked up quite so much withouttalking about AI.
Yeah.
Where, you know, where this big thing is going to kind of take us and this balance.
And I've got a bit of a theory at the moment, Simon, because I mean, we've talked a littlebit.
(17:37):
before about service with respect and this massive rise of abusive behavior and thisdehumanization.
Now, at the institute, we're big fans of AI and technology in terms of being able to drivegreater efficiencies, but it's its deployment that's going to be really important as far
as workers' services.
How are you, I guess, looking at technology and particular AI, and where do you see thatgoing in the next five years?
(18:03):
Such an important question, Joanne.
I think that, you know, we've already touched on this, but, as we think about how do weserve customers better and also become a lot more efficient, know, AI definitely presents,
you know, real opportunity to do that.
But I think we have to start with a really important principle, which is about how youbring people and technology together.
Yes.
It's not one or the other.
(18:24):
It's a really conscious set of choices about where does having the best people and thebest, you know, human interaction will really drive this thing?
sickness.
really count.
Absolutely.
And then where does technology and automation enable you to support your team, be betterfor customers?
And that's the way we think about it.
some of the things that we're doing in the automation AI space at the moment, which issignificant.
(18:48):
we've just automated all of our supply chain forecasting in food across the UK.
Why is that really important?
It's really important because clearly in a food business, it's something you do every day.
First of all, it's a task that you repeat millions
of times over.
If you think about 30,000 products and we have about 1500 stores, a few less than that,but you get the volume of decisions you happen to make about how much of every product was
(19:17):
sent into every store at every point of time.
So we've just put an AI capability to do that in our company and it's been a fantasticchange because we've learned so much, right?
And the team that have led it have done an amazing job.
because we've never done that before.
And so what have we learned?
We've learned first of all that we can actually get better availability to customers, backto what we said earlier.
(19:41):
Our availability's lifted three points since we got it in place, offered already a prettychallenging kind of number.
So we're really seeing better availability, firstly.
And that's not just in the morning at nine o'clock or 10 o'clock, but that's in theevening where previously we weren't always as good.
Secondly, we're seeing less food waste.
because we're getting more accurate on what we're sending to our stores at a given pointin time.
(20:05):
But actually really importantly, and you know, if no space, I don't know, 24, 25 degreesoutside in, you know, middle of September today.
So what we find is that, you know, the UK isn't the same from the weather or differentconditions point of view.
And that drives a lot of different behaviors and customers as to what they buy.
There's been weekends this summer when there's been a 15 degree difference between theNorth and the South.
(20:27):
So you need different products in different availabilities in different parts of thecountry.
So that would be an example of how we're using AI in the supply chain.
And then maybe another one which is super interesting is that customers more and more arelooking for personalized value.
And without this being in any way too much of a plug for Nectar, what you can do when youshop at Sainsbury's and you've got Nectar on your phone, every week, the day before we do
(20:52):
our biggest shop.
and will be set at bunch of personalized prices.
there are about 95 million permutations at different personalized prices at any point intime, because what will be personalized for you, Joe, or David, Willis, or me, will be
different.
And so we're using that algorithm, that AI capability to calculate that.
(21:15):
So serve up that personalized price.
So let me talk with examples of things that are happening at scale.
And then in a really much smaller way, thinking about
All of our store managers are now using Codequilot.
So if you think a store manager's time is really valuable, so if they can get someAI-capable teams that are using their technology and their reporting, it saves them loads
(21:38):
of time.
Because if we can free up 20 % of our store managers' time to be with their colleagues andtheir customers, then that would be great.
Hopefully.
Okay so some really good examples and what strikes me there is about how you're using italso to really for predictions to bring in different data sets.
when you're talking about the weather I was thinking about you know be able to predict in10 days time what kind of food stocks you might match in the weather's going to be doing
(22:04):
whatever it's going to be doing but it's also interesting how you're using data.
And for a long time, data has always been absolutely critical, but we've never been ableto really analyze it or get it.
It's just too complex.
There's too much of it.
And I guess AI, because of the sheer computing power of that, is going to really shift ourability to get through quite a lot of information about customers.
(22:26):
Totally right and maybe just you know just one line to add to that you know one of thethings in this in the UK we have to think about is how do we support our farmers to grow
enough food at the right place.
Farming is a very tough industry actually.
I know you're really big on this Simon, in terms of welfare.
Well, there's definitely welfare and support for all of the food that gets produced in theUK, but also helping farmers with AI and data to have better insight on the volume that
(22:56):
they need to prepare for.
So I think more and more with AI, we've got to think at the system level.
What's the customer outcome that's expected or differentiating?
And then how do you organise every part of system towards that?
And I think again that that this really was starting before about the connectivity and ina world now which was so much more connected really looking at the different impacts of
(23:21):
all aspects Fascinating and really interesting and we're definitely gonna get ourselves toyour store because I know you've got an innovation store
Yeah, I I just look maybe some of the other tensions that we should talk about, know,because, you know, a of hot topics definitely in our industry is how customers want to
check out and
Yeah, self-serve
(23:42):
Lots of feedback on that Joe, know, look, yeah, it's a real challenge for us, right?
Because that's the point I made earlier, you know.
In some ways it's, you know, it's kind of pretty irrational, isn't it?
If I could say it that way, that you'd go into a supermarket, you'd take the trolley,you'd fill it all up, and then you'd get to the traditional checkout as well.
Then you take it all out again, and then you put it all back in again.
(24:04):
So there's a reason that we were trying to save customers time because actually time is areally big deal when you're under pressure.
lots of customers actually like self checkouts and about 65 % of all of our customers usea self checkout.
And just to assure you, because I this will be really important to you, we measure reallycarefully what the customer satisfaction is on our different methods of pavement and when
(24:27):
it's not good enough we work to improve it.
But actually self-checkout customer satisfaction is one of the highest in the store.
But there's lots of customers, I you're telling me you want to use a traditional...
You know.
Well certainly want to have choice.
I think choice has been probably at different times.
It might not be.
So our absolute commitment is however you want to play, you can play.
(24:53):
Now, if you're in one of our supermarkets, because you're very keen early bird at seven inthe morning and there's no one else there or eight at night and the checkout isn't open,
we'll open it for you.
But coming back to the test store that we were describing, we were trying new waves ofcustomers checking out.
And there's quite a lot happening in this area at the moment.
know, so I think when you look around the world, everyone's trying to solve how to helpcustomers with a big, troggy checkout more efficiently.
(25:16):
I think technology will play a really big role here.
But also sometimes just giving customers choice back, as you say.
So we're trying.
different types of checkouts where customers can, if they want to use an old, long,traditional type of checkout, we'll let them do that.
We've put some on where they can scan it themselves.
There's more space to do that because quite often customers like to have just less time,pressure, and more space.
(25:38):
We're also using what we call Smart Shop, which means that you can scan as you go aroundthe store.
When you do that, that also means that you can get lots of extra value and prices.
So we're trying lots in checkouts.
That's quite interesting.
We're also trying lots of things on sustainability as well.
with this, you know, in a supermarket we use lots of electricity, we crave lots of carbonand so we think about all the refrigeration, all the space we have to make it as efficient
(26:03):
as possible in that.
too.
mean I know that they were very big about you know shrink wrapping and getting rid of someof those kind of points.
It's just the right thing to do.
Obviously you've got to have packaging where products are to get damaged on their way intothe store.
So there's lots of things where you have to put some kind of packaging on products.
(26:23):
we've done lots and lots and lots to take a lot of plastic out or replace plastic withalternatives.
It spats the tension.
I remember about a year and a bit ago we made a very big decision to challenge thepackaging on some of our mints.
I know it well yes absolutely
example, right?
It's one of the highest volume products in our whole range.
(26:48):
5 % to 12 % meant very popular volume product.
It came in a big tray and it's lots of in there.
So we have a plastic in our packaging, lots of customer feedback, lots of pretty areas ofcustomer feedback.
But in the end, when you cook it, it's the same.
I was going to ask about that because, you know, this is about change too.
(27:11):
And as human beings, some of us are better at change than others and the speed of change.
So when you're trying to put some of those things in, know, one thing I would say, Simon,is you're very visible as a chief exec.
You write to your customers, you explain why we are doing things.
And, you know, 18 months on,
(27:32):
probably most of us have got used to the fact that, as you said, it's the same meat, it'sthe same packaging.
But, you know, what would you be saying to this audience around how you help take yourcustomers sometimes with you?
Because it might be a very good reason to do that, and it's no different, but you've stillgot to sell that idea in, haven't you?
Yeah, there you have
And I think you've always got to start with we can always do this better.
(27:55):
You know, because at the end of the day, the only group of people that can decide whetherwe've done things right or to their expectations are our customers.
And so, you know, I definitely wouldn't start from a point of view of, you know,everything we did on that we got perfectly right.
I think we learned a huge amount through that process about how we could have communicatedeven more clearly, how we could have made sure on the path it was really clear.
(28:20):
You know, it was a good example.
of the big idea was clear, but how do we keep making sure we learn how we do it?
And I think that the job for all of us leaders or boys in any customer service industry isevery day, every single day, you learn a lot about what you can do better.
I'm very, very lucky in the world that I do, because every evening I get lots and lots ofcustomers write to me.
(28:45):
There's a sort of time of the day where people get home from work or they've the tea forthe family and I think right now,
had us time to talk about the things that you could have done better.
And so, you know, that's an example of what we did with big change.
There's lots of others, but my key point here would be you learn a lot from listening tocustomers as you make those changes.
Yeah.
(29:05):
You adjust when you need to.
and the packaging, went back and improved it in that example.
And then lots and lots of things.
mean, the way our team worked in Sainsbury's, they do amazing jobs.
Every single week, we have obviously a meeting to review how we've done.
And the first thing we talk about is what was our customer satisfaction in the week beforein every single dimension of what we did.
(29:27):
And if something moved, we really understand what caused it to move.
Yeah, and it may mean that you don't change something as a result of that, but literallyyou understand.
So this whole point of about seeking to understand.
So I'm going to talk a little bit about up-skilling.
professionalisation of customer service.
You know that this is something that's very dear to the Institute in terms of being ableto attract more people into the industry, 60 % of our workforce work in customer related
(29:55):
roles.
But not just to see it as something that I do for short time, but the skill sets thatwe're now looking for in customer service professionals are much more complex, for
example, than perhaps they were 10 years ago.
So
We were talking before about we are seeing a bit of a challenge at the moment because somepeople are leaving customer service because they're not feeling perhaps as loved by
(30:17):
organisations as they should do or as invested in that.
You made a comment earlier about your people being king and you pay them a good wage interms of connection.
But what about development and how can we ensure not just in retail but in the wider spacethat customer service professionals
a bit more respected and that we can see there's a proper career for
(30:40):
That's brilliant question and one that we've all got to be really caring about, Because asyou say, so much of our economy is driven by really dedicated people providing the service
every day.
And if we don't get the balance of skills right, and also the diversity of skills right aswell, then there's an economic downside to that situation.
(31:01):
So I think that it's just in terms of the way we can fight it, it's not just about pay.
And I want to really make that point.
But I think it's an important principle
not to step over.
And so our start point is that we work in a competitive industry, you know, we have tomake sure that we're very attractive as a place to work.
fair.
Definitely fair, but also if you want to work in this industry, it's hard work.
(31:24):
know, thousands of our people this morning would have been up at three o'clock heading tothe store, filling up the store, baking bread, picking online products.
It's hard.
It's a hard job.
so making sure we prioritize paying our colleagues fairly, but a leading rate in themarket is very important to us, alongside all the other things that need to go into
(31:47):
providing a great custom service.
So what does that look like?
First of all, just as we don't always get everything right for our customers, we don'talways get everything right for our colleagues.
You've got to listen, haven't you?
You've got to really dialed in, and any of our leaders in our company do this.
So we do lots of listening with our colleagues.
Every month, for example, a bit like we're doing now, we have just a really open callwhere any one of our team can dial in and ask me anything they want to talk about.
(32:13):
Because one of the things about, I think, a customer environment is it's very intense, andyou need to wait also as a colleague.
or a member of team to share in our flow what's happening in your part of business.
So two-way communication, listening, really understanding what's really going on.
Our people in each part of this is a really important part that as well.
And I think that's part of building a professional respect for the role that everybody,plays.
(32:40):
Exactly, And then I think that, you know, one of the big things we need to see as we allwork with this new government to help shape their agenda
you
is we need a real focus, don't we, on skills and capabilities.
I think, I'm sure it's something you're on, Jo, it's on the mind of many businesses.
It's good to see the early signs of the shift on the apprenticeship levy, that's good.
(33:03):
But it's still a long way to go.
We need to create a real platform for businesses to prioritise investment and training andskills.
And particularly in silivics, because that really requires a long-term, sustained effortand policy
needs to help.
So I think it's a combination of looking after the priorities that people feel fairly andwell rewarded and engaged, making sure you really understand what's going on in support of
(33:34):
people serving and looking after customers every day and where things aren't right,adjusting things accordingly.
And then thirdly, creating a real investment around capability and skills in customerservice because it's such a critical part of what we do every day.
and on the wider scale and therefore the policy and what we're asking of government.
And I know that you are particularly championing the apprenticeship now, because you knowthat the Institute is also...
(34:00):
It's brilliant the work industry that we've been on this and you know I think there's justbeen so much wasted money actually that could have gone into great training and look one
of the things you know we would say is just to make sure we use every single pound of thatlevy to help improve skills.
Totally.
And you mentioned obviously having a new government forming that.
(34:23):
The UK is not without its challenges at the moment and we don't live in an isolatedbubble, do we?
The whole world has got significant challenges.
But I do think this is a huge opportunity to really raise the profile and the impact thatcustomer service can have to a business.
And I know that that's something that you feel very strongly about as well.
There's one bit just to that, about how we try and help organisations, maybe, andbusinesses to be less short-term in our thinking and not longer-term.
(34:52):
And that is another tension, isn't it?
Because every week you're having to return to the shareholder and that whole kind ofpiece.
But any thoughts on that we can try and encourage us to be thinking further out, becausesurely that is the only way that we're going to be able to sustain our businesses.
Yeah.
Look, I think it's a key question, isn't it?
(35:13):
Which is, is what I'm doing today leading to long term?
Yes.
How we create, you know, better outcomes for customers, improve value for stakeholders andthe more sustainable way of doing things.
And it's quite hard when you're dealing with short term challenges to always make sureit's connecting into that long term picture, it?
Which is why, you know, one of the things that I would say in our organisation we've beenreally working on is what does it take to become really purpose driven?
(35:40):
Yes, I don't say that as kind of grand, you know phrase well reason I say it's because ifyou're really clear as a team as a business or where you want to get to with long term it
really helps then sort out some of the choices closer to now which
you need to make yes or no decisions on and maybe just a couple of examples of the sort ofthings it's helped us with.
(36:04):
So you ask about long-term thinking, as I was describing, we work obviously in the UK foodspace.
And we've got a real challenge in the UK about our resilience of the food we produce here.
I mentioned it earlier on.
So one of the things that has been quite different that we've been working on is that wewould have agreed with our suppliers contracts for a year, 18 months, and then we'd come
(36:28):
back and renegotiate those.
And in lots of our fresh food categories, we're now agreeing contracts over seven and 10years.
Why is that really important?
Well, it's really important because if I'm producing fresh vegetables,
that's your question on automation.
It's very hard to go and commit to big investment in capital infrastructure to pickvegetables in that case unless you're really sure that you've got a long-term volume
(36:56):
commitment.
so, actually this morning just went out without key produce suppliers together and we weretalking about exactly this point.
If you're going to produce more sustainably with less impact on the environment, then
same rules apply.
There's a lot of our work in our business about helping suppliers have more confidence andthen the other point is that if you think in longer time frames trust is just much higher
(37:23):
isn't it because we're not sitting opposite each other across the table once a year.
So you know I think it's a good opportunity just to kind of reset the rules of partnershipand when you do that you know I always think about you know when you're leaning in at kind
of 45 degrees each
you know, no one can fall over.
(37:44):
So you're building trust, you're creating a longer term picture and you're linking it toreally where you want to get to.
So something we really passionately believe in and it's true with our suppliers, it's truewith partners, it's true with our colleagues.
We don't always get these things right, but how do we think longer term?
I love that phrase about the fact you're all leaning in.
And I know that you're really big on that, Simon, about leaning in together to resolvethat particular issue.
(38:08):
And it does feel much more than like it is a partnership and it does feel that everyonehas a place to play in that piece.
Simon, I know you've been very generous with your time, so I don't want to take too muchmore of it.
But I suppose my final question really would be, is, you you...
not only are you CEO of Sainsbury's, but you do lots of other things in terms of trying tohelp business to be perceived well.
(38:34):
You mentioned about reputation and trust.
So if you could ask for one thing, Simon, in terms of the UK and perhaps to narrow it downa little bit more on the service agenda, what would you encourage other CEOs perhaps in
industry sectors that maybe are not perhaps?
as focused as you might be on what we've been talking about this afternoon, why theyshould do that and what would you like them to do more?
(39:01):
Well, I'm not, I'm an optimist and I see in here we'd have the privilege to meet lots ofleaders and different stakeholders.
And I actually think there's quite a big seat change on the way at the moment.
Because actually competition and the level of change means there's no option actually, ifyou want to have a successful business outcome to get closer to customers.
(39:25):
one of the things I would observe in our industry and the one I'm part of, is that it'sreally
intensely competitive, but quite a lot of topics pre-competitively, we're working actuallyquite closely together, right?
And sustaining this is a good example of that.
So I think, you know, I think at the kind of system level, there's good evidence actuallyof business working differently.
(39:48):
In the end, I mean, there's only two things I think that really sort of differentiatebusinesses that are really focused on customers to your question, and maybe those that
could be more so, and that is being really close to a customer.
of thinking and feeling all the time, isn't it?
Because that really does tell you to what extent you're meeting your long-term commitmenthere and now.
(40:11):
And I think one of the things that's quite encouraging in a lot of leaders I've privilegedto spend time with is that lots of people spend more time, and VAMU spends more time doing
that, and that the work of the Institute in that area is really good.
And I think we've got a massive opportunity, actually, to work with this new government.
to link their key objective growth with the difference that customer service can make togrowth.
(40:36):
There's such a hard wire there that I think now is the time to really amplify.
Yeah, I'm pushed on that.
know, as all of the work on the return on investment-making service and skills andcapabilities in automation as we've talked today, I think we have to make it really clear,
you know, how that links to growth.
(40:57):
And if that is clear, then policies will flow from that and expectations will rise, whichis what we need to see.
Simon, thank you so much for spending your time with us this afternoon.
I really, really appreciate it.
Thank you, Simon.
I hope you enjoyed that conversation with Simon as much as I did.
It is absolutely a pleasure to be able to spend time with business leaders, understandingabout what keeps them awake at night when it comes to service, business and the wider
(41:26):
economy, and more importantly, what they're doing about it.
So join me next time for a slightly different, but no less interesting conversation.
with economist Simon French.
Until then, do take care.
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