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Reducing food waste improves profitability of grocery retail

Resources:
Materials, Carbon
Sector:
Wholesale and retail
Read more
Total cost savings:
Cost savings are achieved via reduced waste, reduced waste of goods, and improved productivity
Premises and operation areas:
Supply operations
Size of company:
Micro (less than 10), Small (less than 50), Medium (less than 250), Large (more than 250)
Advancement in applying resource efficiency measures:
Intermediate
What is in it for you:
Reducing food waste is directly linked to grocery store profitability. Successful food spill management improves profitability by 40 %.
Descriptive information:

When groceries end up as waste, the entire economic input used to produce and transport them is lost.

In Finland, the value of food waste in the retail grocery sector has been estimated to be 1.5 % of the total sales value. For grocery stores, food waste even causes additional work costs, when the expired products need to be collected, transported, reloaded and deposited.

Reducing food waste also significantly lowers the environmental impacts related to food production. Groceries that end up as waste correspond roughly, in CO2 emissions terms, to 100 000 cars.

Many ways to reduce food waste

Food waste can best be reduced by more efficient product selection, stocking operations and by using electronic forecasting and ordering systems.

The most challenging groceries in terms of food waste are bread, vegetables, convenience food, fish, meat and dairy. Advanced forecasting systems can mitigate wastage in these lines.

Staff plays a critical role in minimising food waste. Employees should be well informed about first-in-first-out shelf-stocking practices and engaged in food-waste reduction campaigns.

Reduced pricing practices on items approaching their 'best before' dates encourage customers to buy products that could otherwise end up in waste.

By offering smaller packaging sizes and helping shoppers plan meals, grocery stores can help households reduce their food waste, as well.

By taking measures to reduce food wastage, grocery stores can significantly improve their profitability and gain a competitive advantage. Communicating to customers about food-waste reduction efforts and providing advice to help them reduce their food waste can also improve customer relations and corporate image.

Sources

Motiva Oy, License to eat - website about reducing food waste, http://www.saasyoda.fi/h%C3%A4vikki%C3%A4-v%C3%A4hennet%C3%A4%C3%A4n-kau...

Kesko's Responsibility Programme 2017, https://www.kesko.fi/globalassets/pdf-tiedostot/kesko_sustainability_201...

Koivupuro, H. (2010) FOODSPILL – Food wastage and environmental impacts, Seminar presentation: Henvi Seminar Series Food and Environment – Sustainable food cycle, http://www.helsinki.fi/henvi/yvv/esitykset/Koivupuro.pdf

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