Supermarket chain Sainsbury’s is installing a new business intelligence (BI) system to monitor the sales of specific products, check the effectiveness of promotions, and see customer buying patterns within specific demographics.

The supermarket giant is installing an application called Self Serve, from supplier Loyalty Management Group (LMG), the company that supplies it and other stores such as Debenhams and BP with the Nectar Card reward scheme.

The new system comes under a deal announced last year, for Sainsbury's to use more data analytics services from LMG.

The first phase of the new system, called Brand Health, is due to go live in April. It will take sales data from Sainsbury’s stores across the country and provide reports on how well particular brands are selling, and when and where they are selling. The system also shows what other goods consumers are buying alongside a particular product, and if a product declines in sales it will show what other products consumers have switched to.

In the second phase, which will go live in July, two more modules will be used. Promotional Effectiveness will provide information on how well a particular brand has performed before and after a promotion, and New Product Development will monitor how well new products are selling in stores.

Discussions are also taking place for a third module, a Media Optimiser, to provide reports on how well different types of promotion in different media are working. LMG said discussions were in the early phase and no decision had been made on whether to roll out this part of the system, and would not provide information on how the module would work.

A number of Sainsbury’s suppliers will also roll out the Self Serve system in order to monitor sales of their own products in the supermarket chain. LMG will store the data from Sainsbury’s stores in its own database, and send relevant data to the Self Serve system at the suppliers to produce reports.

Garth Ralston, development and support manager at LMG, said the system would also be used to demonstrate more specific information on who was buying what, for customers who are in the Nectar card loyalty scheme. “We’d be able to show information like: women aged 18-30 in a certain part of the country are buying a lot of Diet Cola,” he said.

Ralston said the system was developed using Adobe Air and Adobe Flex technology and would have graphically-led, simple to read reports which could be tailored if the user required a change of graph type, for example from pie charts to bar charts.

Last month Sainsbury's, which was the subject of several failed takeover attempts in 2007, reported record online sales in the week leading up to Christmas, not long after stating that it was also successfully on target with plans to save £155m in IT costs in the 2007-08 financial year. A full savings announcement will be made in the company's annual results announcement in April.