For large retailers, the challenge with AI is not whether it can help, but how it fits into daily operations. A new three-year AI partnership with Tesco shows how one of the UK’s largest supermarket groups aims to do just that.
Tesco will work with Mistral to develop AI tools that can be used in its business, from internal workflows to customer-facing systems. The company says the aim is to save staff time, improve the way teams work and enhance customer service. Ruben Lara Hernandez, director of data, analytics and AI at Tesco, said he hopes the partnership will bring together Tesco’s retail experience and Mistral’s technology, allowing colleagues to work more efficiently and support customers more effectively.
Tesco brings AI to everyday retail operations
The company’s focus reflects broader changes in how companies use AI. Early retail experiments often centered around customer-facing tools that were easy to see but difficult to scale. Recent efforts are aimed at internal use, with AI reducing repetitive tasks, supporting planning and enabling staff to make decisions faster.
Over the past five years, the retailer has doubled the size of its technology team, demonstrating that software and data are now core to its business operations. AI is already being used in several parts of organizations, including internal development and partnerships.
For online grocery stores, AI can help find more efficient delivery routes, freeing up additional delivery slots for customers. In supply planning, AI supports demand forecasting and helps stores keep products in stock. The company also uses AI to personalize how it engages with customers through its Clubcard loyalty scheme, tailoring offers and communications based on shopping behavior.
The partnership with Mistral aims to build on this existing initiative. One factor behind this collaboration is Mistral’s approach to model deployment, which allows AI systems to run in a more controlled environment. That level of control is important for retailers who handle large amounts of customer and operational data.
Marjorie Janiewicz, Mistral’s chief revenue officer and U.S. general manager, said the company’s applied AI team will work closely with Tesco’s in-house experts. She explained that the goal is to build customizable and controllable AI products with a focus on improving internal workflows and customer experience.
Long-term partnerships, not one-off projects
The structure of the partnership also suggests a cautious approach to scale. Tesco will establish an in-house AI lab as part of the deal, giving teams space to test and refine their tools before rolling them out widely. For large organizations, this type of setup can help prevent AI projects from remaining in isolated pilot or expert teams.
There is also a strategic aspect to partner selection. Mistral AI is the only European company developing language models at scale, and Tesco is the first major UK retailer to partner with the startup as part of its broader AI and technology plans. Founded in April 2023, Mistral has grown rapidly and counts companies such as HSBC, AXA and Stellantis among its clients.
For Tesco, the more difficult task lies in execution. Retail data is often fragmented by region, system, and channel, and AI systems rely on that data to be accurate and consistent. Deploying a tool in a company of this size also requires training, oversight, and trust from the staff who use the tool every day.
The success of this partnership will likely depend on how visible its impact is within the organization. As AI tools help store teams, planners, and analysts work more smoothly, the benefits can be gradual rather than dramatic.
As retailers look to move beyond experimentation, Tesco’s approach illustrates how enterprise AI is beginning to take root in daily operations, not as a single solution but as a process of steady change.
(Photo courtesy of Shashank Verma)
SEE ALSO: ZARA’s use of AI shows how retail workflows are quietly changing
Want to learn more about AI and big data from industry leaders? Check out the AI & Big Data Expos in Amsterdam, California, and London. This comprehensive event is part of TechEx and co-located with other major technology events. Click here for more information.
AI News is brought to you by TechForge Media. Learn about other upcoming enterprise technology events and webinars.
