A new study published in the journal INFORMS Management Science is challenging long-standing assumptions about how grocery stores manage perishable goods—and the findings could reshape how retailers think about both profit and sustainability.
Researchers found that simple, low-cost adjustments to how items are displayed and discounted can significantly reduce food waste while increasing revenue. The study reveals that retailers don’t need to rely on new technology or drastic changes in consumer behavior to see meaningful gains. Instead, optimizing shelf placement and pricing strategies can deliver measurable results.
The research focused on perishable items such as produce, dairy, and meat—products that naturally decline in quality over time. By analyzing thousands of simulated retail scenarios, the study examined how product display, discount timing, and discount depth work together. The conclusion: placement matters nearly as much as price.
When older items nearing expiration are placed in more visible or accessible positions—like the front of a shelf—customers are more likely to purchase them. This seemingly small shift can have a major impact. Compared to traditional setups where all items are treated equally and rarely discounted, optimized strategies led to an average profit increase of just over 6% and a reduction in food waste exceeding 21%.
The findings push back on the industry’s conventional wisdom that prioritizing only the freshest items at full price is the safest way to protect margins. Instead, the data shows that retailers can achieve a rare win-win—boosting profits while cutting waste.
“Retailers don’t have to choose between profitability and sustainability,” said Zumbul Atan of Eindhoven University of Technology, one of the study’s authors.
The study also highlights that strategy should vary depending on the type of product. Slower-decaying items like dairy benefit from prominently displaying older inventory with small discounts. Faster-spoiling products like meat or prepared foods perform better when fresher items are emphasized and discounts are more aggressive. Meanwhile, low-cost items like fresh bread may still require complete shelf turnover when new stock arrives.
Even retailers that avoid discounting—such as Walmart—can benefit. The study found that simply improving product placement can reduce waste and improve profitability, especially in stores with unpredictable customer traffic.
With up to 40% of food in the U.S. going uneaten, the implications extend far beyond retail margins. Food waste is a major contributor to methane emissions and climate change, making operational improvements in grocery stores a potential lever for environmental impact.
Ultimately, the research underscores a powerful idea: small, strategic decisions already within retailers’ control can drive meaningful economic and environmental change—without asking shoppers to do anything differently.