In the ongoing battle against food waste, a groundbreaking study published in the esteemed journal Management Science reveals a promising strategy that requires no radical technology or fundamental changes in consumer behavior. Instead, it explores how millions of grocery retailers worldwide can leverage subtle, yet pivotal, operational decisions—specifically relating to the display and discounting of perishable goods—to simultaneously improve profitability and significantly reduce spoilage. The findings challenge traditional retail wisdom, asserting that the spatial arrangement of products on shelves is nearly as critical as their pricing in shaping consumer purchasing behavior and waste outcomes.
This innovative research targeted perishables prone to quality degradation over time, including fresh produce, dairy, and meat products. Employing advanced analytical modeling techniques and simulating thousands of retail scenarios, the authors delved into the dynamic interplay of three core factors: the physical placement of items within the retail environment, the timing of discounts applied to aging products, and the depth or magnitude of these discounts. The meticulous quantitative approach allowed for a nuanced understanding of how these variables influence consumer choices, retailer margins, and waste levels.
Central to the study’s revelations is the profound impact of product positioning on consumer decision-making. By strategically moving older, soon-to-expire items toward the front or more accessible sections of displays, shops can nudge customers towards purchasing goods that might otherwise remain unsold and discarded. This spatial optimization, coupled with judicious discounting policies, produced an average profit increase of 6%, alongside a remarkable 21% reduction in relative food waste across simulated environments. Such a dual benefit breaks the conventional retail mindset that prioritizes selling only the freshest items at full price to protect profit margins.
Historically, retailers hesitated to discount perishable items extensively due to fears of devaluing their brand or cannibalizing full-price sales. The new analysis offers a counter-narrative, showing that when combined with intelligent display techniques, discounts can be calibrated to avoid these pitfalls. Moreover, even retailers who eschew traditional discounting, like “everyday low price” chains, stand to gain from simple display adjustments, especially in stores with unpredictable customer traffic patterns. This discovery widens the scope of actionable strategies across various retail formats and business models.
The study further emphasizes that the optimal display and discount strategy varies according to the perishability profile of the product category. Items with slow quality decay, such as dairy, benefit most from placing older stock prominently paired with modest discounts. Conversely, quickly deteriorating and costly items like meat or prepared meals require prioritizing fresher inventory upfront and implementing deeper, more aggressive discounts to encourage timely sales. For extremely fast-decaying yet low-cost products like bread, the recommended practice is to clear shelves entirely when fresh stock arrives, avoiding the complexities of discounting or positional adjustments.
By dissecting the consumer psychology underlying shelf selection, the research clarifies why accessibility plays a pivotal role. Shoppers tend to grab items that are easiest to reach or most visually prominent, especially for price-sensitive purchases. This influence extends to perishable purchasing decisions, where accessibility can tip the balance between choosing a product with greater remaining shelf life versus an aging item nearing expiry. The insights gained provide retailers with a powerful lever to align inventory management with sustainability goals without sacrificing revenue.
The environmental implications of adopting these refined merchandising tactics could be substantial. Food waste contributes significantly to methane emissions, a potent greenhouse gas exacerbating climate change. Globally, approximately 17% of produced food is wasted, with retailers responsible for a meaningful share. In the United States alone, food waste accounts for an alarming 40% of food production losses. Thus, operational decisions at the retail level promising both profit enhancement and waste reduction could ripple through the entire food supply chain, reducing carbon footprints and conserving resources.
Beyond environmental benefits, this research highlights a critical paradigm shift in retail management, underscoring that sustainability and profitability need not be mutually exclusive. These findings advocate for an integrated approach to operations that prioritizes system design and process optimization over relying solely on consumer behavior changes or expensive technological interventions. Small design enhancements in shelving layouts combined with nuanced pricing tactics serve as cost-effective, easily deployable tools to improve retail outcomes holistically.
The authors of the study, hailing from renowned institutions such as Eindhoven University of Technology, University of Texas at Dallas, and University of Florida, stress the practical applicability of their findings. They underline that retailers are equipped today to implement these strategies with minimal disruption, relying on existing technologies like dynamic pricing systems and standard shelf-assignment protocols. Adopting such evidence-based operational adjustments promises tangible economic payoffs alongside ethical imperatives to reduce waste.
Perhaps most importantly, the research advocates for an empathetic assessment of supply chain management, one that recognizes the interdependence between business viability, consumer convenience, and environmental stewardship. By optimizing retail displays and discounting not merely to drive sales but to align with product perishability and waste potential, retailers can craft a sustainable competitive advantage. The study thus delivers a compelling call to transform retail practices—turning what was previously a zero-sum tradeoff into a powerful synergy of profit and planet.
In conclusion, this comprehensive investigation validates the notion that well-informed, data-driven operations management can revolutionize food retailing. Beyond experimental frameworks, real-world applications of these principles have the potential to reshape how perishables are marketed, influencing global efforts to curb food waste. As food insecurity and climate concerns escalate worldwide, this research offers a scalable blueprint for retail that promotes smarter consumption, greater efficiency, and sustainability aligned with profitability.
Subject of Research: Retail operational strategies affecting perishable food waste and profitability
Article Title: Displaying and Discounting Perishables: Impact on Retail Profits and Waste
News Publication Date: February 25, 2026
Web References:
- INFORMS journal Management Science article: http://dx.doi.org/10.1287/mnsc.2023.00316
- INFORMS: https://informs.org/
- Full study: https://drive.google.com/file/d/1f4chc4jlvfICii657THgjFjXBDNbWHqk/view?usp=sharing
Keywords: Food waste reduction, Retail profitability, Perishables display strategies, Dynamic discounting, Consumer behavior, Sustainability in retail, Operations research
