Smart Pricing to Cut Food Waste: New Research Pushes for Expiration Tracking in Grocery Stores

A seminar hosted by the Department of Operations Management at CBS, Lauri Saarinen from Aalto University presented his research on reducing food waste in grocery retail through expiration tracking and dynamic pricing. Conducted in collaboration with an online retailer, the study found that automated markdowns based on product expiration dates reduced waste by 9.6% in key perishable categories.

11/04/2024

newstory

Photo by Kenny Eliason on Unsplash

According to the United Nations, approximately one-third of all food produced worldwide is wasted, with a substantial portion occurring at the retail level due to expired unsold goods. The research suggests that dynamic pricing — adjusting prices of perishable items based on their remaining shelf life — can significantly help reduce waste. However, the absence of expiration tracking in current inventory systems limits the effectiveness of this strategy.

The study recommended several policy actions to support wider adoption of this approach, including mandating 2D barcodes with expiration data for real-time tracking, focusing on high-impact categories like meat and fish, and prioritizing highly perishable goods to maximize impact. It also proposed industry-wide mandates for dynamic pricing on perishables, allowing retailers to adjust prices based on freshness to effectively reduce waste.

Lauri Saarinen, who will also co-teach CBS students in Business Analytics alongside Leonardo Santiago, emphasized that these policies could help the grocery sector align with the United Nations' goal of halving food waste by 2030, fostering a more sustainable retail environment. 

The page was last edited by: Department of Operations Management // 11/04/2024