7.4 Retail
Retailers include the actors selling food directly to consumers, and could include supermarkets, markets and grocery shops. Being an important interface towards the households, the retailers hold an important role in the value chain for the work with reducing FLW, not simply in the store, but also in other parts of the value chain. The retailers must ensure that the products are available for the consumers, while avoiding that food is being thrown away. Activities the retailers engage in include for instance selling, displaying and marketing the products, all of which might have an important impact on FLW.
Overall analysis of causes
Knowledge about why waste occurs in retail is relatively extensive. Internationally, many studies have been conducted, several of which are from the Nordic countries. Generally, food chains in many countries have gained increasing levels of power and can set conditions upstream in the value chain while having a significant influence on consumer behaviour. Therefore, retail affects not only FLW in its own operations but also waste among suppliers and especially among consumers.
In recent years, retail has successfully worked to reduce waste in stores. It is increasingly common for products with short dates to be sold at discounted prices. Additionally, there are many initiatives to tackle the surplus that arises. Some stores have employed chefs who prepare lunch boxes using food that has a short shelf life remaining. In other stores, there has been an increase in donations. Although there is great benefit in donating food that is about to expire, retail needs to increasingly work with activities higher up in the waste hierarchy and simply work to prevent FLW altogether.
However, a study from 2023 showed that measures against FLW that are not perceived as economically profitable are not being implemented. Improved ordering systems that reduce waste are economically profitable, as is selling products approaching their expiration date. Donating food can sometimes – though not always – reduce waste management costs.
It is considerably more difficult when FLW comes into clear conflict with satisfied customers and profitability maximisation. This includes measures such as limiting the product range and removing items with high waste and ceasing campaigns that attract buyers to a store. In short, profit maximisation almost always trumps sustainability in internal operations.
Campaigns are used to attract consumers and encourage additional purchases. When a shop has special offers, it does not want to risk running out and, therefore, orders with a margin, as customers may be disappointed if the campaign product is sold out. Campaigns also drive waste for non-campaign products. For example, when two types of mixed salad are sold at a special price, other salad mixes are likely not to sell as much.
Shops naturally want satisfied customers and try to fulfil as many of their consumers’ needs as possible. Fresh in-store baked bread is offered even in the evening, leading to high waste figures. The desire to meet customer demand in full means that the product range is sometimes too large to avoid waste. Products are delivered in a certain quantity in a secondary package, which can be problematic for products with low turnover that do not sell before they become too old. Nevertheless, even the desire to sell more enables an unnecessarily wide range – from an FLW perspective – such as yoghurt flavours that come and go. The more varieties there are, the greater the difficulty in accurately predicting how much of each type should be ordered.
Consumers have high demands regarding the appearance of products, which means that many avoid fruits and vegetables that do not look perfect, leading to many fully edible goods being culled. The problem is exacerbated when consumers squeeze products, such as avocados and tomatoes, to determine the degree of ripeness, which leads to spoilage. In recent years, however, several retail chains in various trials have offered a range of imperfect goods at lower prices.
When shops receive goods, it sometimes happens that they do not meet the retailer’s requirements. This can involve damaged packaging that becomes difficult to sell or fruit or vegetables that have become too ripe, where the retailer estimates that not everything can be sold before it spoils. The shop can then choose to return the goods to the wholesaler/producer, often at no cost. To reduce this so-called credit waste, wholesalers and retailers sometimes try to agree on a reduced price, with the retailer attempting to sell off parts of the delivered goods instead of returning them to be discarded. For some shops and goods, crediting is extensive, and what the shops return essentially becomes food waste.
A common reason for waste is the lack of routines around information sharing among producers, distributors, and retailers. The ordering tools developed to help retailers order the right goods are working increasingly better, but the competence and engagement of shop employees also affect how well the tool functions. When products arrive at the shop, waste can be caused by staff lacking good routines for receiving, restocking, and rotating older products so that they are placed at the front. Sometimes, it is due to a lack of knowledge or lack of time to restock shelves from the back. The causes of waste in shops also depend on the product category and product level being handled. Considerably more knowledge is needed to handle fruit and vegetables than jars of jam.
There is also an economic trade-off between maintaining fewer working hours in the shop and using more staff time for measures that lead to reduced FLW. However, there is an untapped potential to invest more staff hours in the fruit and vegetable department, with economic profitability around waste reduction.
Correct storage of fresh goods at an appropriate temperature is crucial for shelf life. More and more shops have invested in better refrigeration for storage in shops so that sensitive goods are displayed in refrigerated counters. This contributes significantly to waste reduction.
Certain business models can influence the occurrence of waste, for example, when food producers “rent” shelves in the shop and are responsible for filling and clearing them. When different suppliers share the space, no one wants to risk their variety being out of stock when the customer comes to shop, which leads to excessive supply relative to demand. In addition, many shops have marketed a wide selection of fresh bread up until closing time to lure customers to their shop. This business model also means that the shops themselves cannot limit the range and sell off bread with a short date. The model also provides low economic incentives for retail to reduce bread orders. In Norway, it is estimated that 200 loaves are thrown away every minute throughout the year.
Retail seeks various ways to reduce bread waste; for example, different digital solutions have been developed to help shop staff with monitoring and ordering for bread baked in store. One of these solutions is from Link, introduced at the grocery chain Meny, which reduced bread waste by more than one million loaves or 34% in 10 months. They have also communicated to customers that they have a smaller selection of bread in the evenings.
Proposed measures
Better forecasts and ordering: Ordering systems have developed significantly, but further development is necessary. FLW should be measured at the product level to enable appropriate measures, and waste in connection with campaigns should be analysed as a matter of priority. Communication with customers needs to explain that products with high waste figures are not in the range.
Better storage: Investments in refrigerated counters make a major difference in reducing waste in retail.
Engagement and leadership: When management focuses on the issue and includes it in the daily follow-up on how the business is going, it helps staff create and maintain engagement in the issue.
Education and trust in staff: Educate staff on how to handle products to reduce waste, and appoint key individuals with extra responsibility and a mandate to reduce waste. This is especially important for departments where waste is particularly high, such as fruit and vegetables. Engage staff in suggesting measures to reduce waste. Give more mandate to staff to lower prices on goods with a short shelf life.
Dynamic pricing: For products approaching their expiration date, the shop can implement price reduction to reduce the risk of waste. When excess fruit or vegetables have been ordered, price reductions can also be used to reduce waste. However, it is important that retail does not use the opportunity to give discounts for additional purchases, as there is then a high risk that the consumer will not have time to consume products with short dates. Therefore, special sections or shelves should be introduced for these products to make them easier to find and encourage consumers to buy them. Substantial discounts in the evening can also reduce waste of in-store baked bread.
Right packaging for the right product: It is particularly important to keep track of how different packaging designs contribute to increased waste or prevent waste in the fruit and vegetable department. It is also about understanding customers and the sizes or quantities they need so that the range is adapted accordingly. For products that are sensitive to pressure, such as pears and avocados, packaging can provide protection and reduce waste in the shop.
Stop or limit the occurrence of campaigns for fresh goods: As mentioned above, campaigns generate FLW both in shops and households. Above all, campaigns on products with a high environmental impact should be avoided, such as meat.
Own kitchen: In larger shops, an in-house kitchen can be considered where products with short dates are prepared and offered as lunch boxes.
Offer food bags in existing digital forums: Examples of this include ToGoodToGo and Karma.
Collaboration with charity organisations: Establish collaboration with charity organisations to donate surplus food that would otherwise be discarded.
Shops can also take measures to reduce waste among consumers: Stop quantity discounts: Quantity discounts are highly likely to drive FLW among consumers, as they buy more than they actually need.
Stop or limit the occurrence of campaigns for fresh goods: As mentioned above, campaigns contribute to consumers buying in excess. Although this area is relatively unexplored, the purpose of campaigns is to attract increased sales. The larger the quantities purchased, the greater the probability that some goods will spoil before they are consumed.
Communication with consumers: Help consumers reduce their FLW. Inform consumers about the difference between the “best before date” and “use by date” to avoid fully edible products being discarded as well as how they can determine how different products are safe to eat. Try to influence the behaviour of squeezing fruits and vegetables in the shop through information. Explain that the shop provides a limited range and does not have in-store baked bread in the evening in an effort to reduce the environmental impact.