Grocery retailers can significantly cut food waste without investing in new technologies or relying on shoppers to change their habits. New research published in the INFORMS journal Management Science shows that modest operational choices already under retailers’ control—such as how perishable goods are displayed and when, and by how much they are discounted—can simultaneously reduce spoilage and improve profitability. Rather than requiring sweeping structural reform, the study suggests that everyday decisions on the shop floor can deliver measurable gains.
The researchers focus on perishable products whose quality declines over time, including fresh produce, dairy items and meat. Using advanced analytical models and thousands of simulated retail environments, they analysed how three elements interact: shelf placement, the timing of discounts and the depth of those discounts. This approach allowed them to isolate how subtle changes in presentation and pricing influence both consumer behaviour and financial outcomes across a wide range of conditions commonly faced by grocery stores.
Their central conclusion is strikingly simple: where an item sits on the shelf matters almost as much as how much it costs. By making small, strategic adjustments to product placement and coordinating these with well-timed discounts, retailers could increase profits by an average of around 6 per cent while cutting food waste by more than 21 per cent. These gains were consistent across many of the simulated scenarios, suggesting the results are robust rather than dependent on idealised assumptions.
The findings challenge a long-standing belief in retailing that prioritising only the freshest products at full price is the safest way to protect margins. Instead, the research shows that smarter combinations of display and discounting can create a rare win-win outcome, benefiting retailers, consumers and the environment simultaneously. As Zumbul Atan of Eindhoven University of Technology explains, retailers are not forced to choose between profitability and sustainability; in many cases, the very decisions that lift profits are the same ones that sharply reduce waste.
The broader context makes these results especially important. Food waste remains a global problem hidden in plain sight, with roughly 17 per cent of all food produced worldwide going uneaten and retail accounting for a substantial share. In the United States alone, estimates suggest that up to 40 per cent of food is never consumed. Beyond the economic loss, wasted food is a major source of methane emissions, intensifying climate change. The study shows that when older, near-expiry items are made easier to reach—by placing them at the front of displays, for example—customers are more likely to purchase them, leading to a measured 6.01 per cent profit increase and a 21.24 per cent reduction in relative waste compared with common industry benchmarks.
Importantly, the optimal strategy varies by product type. Items that deteriorate slowly, such as dairy, benefit most from prominent display of older stock combined with modest discounts. Fast-decaying and costly-to-discard products, like meat or prepared foods, perform better when fresher items are emphasised, and discounts are applied more aggressively. Even retailers that avoid discounting altogether, such as everyday low-price chains, can benefit from display adjustments alone when customer traffic is unpredictable. As Dorothee Honhon of the University of Texas at Dallas notes, meaningful gains are possible even without price changes. Ultimately, the research reinforces a powerful idea highlighted by Amy Pan of the University of Florida: better operational design can quietly improve profits, reduce waste and make food systems work better for everyone.
More information: Zumbul Atan et al, Displaying and Discounting Perishables: Impact on Retail Profits and Waste, Management Science. DOI: 10.1287/mnsc.2023.00316
Journal information: Management Science Provided by Institute for Operations Research and the Management Sciences