New academic research challenges one of the most widespread principles of fresh produce management in large-scale retail: the idea that selling exclusively at full price is the most effective strategy for protecting margins. According to a study conducted by a group of researchers from the Technical University of Eindhoven, the University of Texas, and the University of Florida, more dynamic management of perishable product displays and pricing can significantly improve both profitability and operational sustainability.
The study, entitled “Displaying and Discounting Perishables: Impact on Retail Profits and Waste”, systematically analyzes how product shelf positioning and the application of expiration-date discounts influence sales, margins, and food waste levels. The results indicate that targeted management of these factors can increase retailer profits by up to 6,01% and reduce waste by an average of 21,24%.
The research is based on advanced analytical models and thousands of simulations that reproduce realistic retail scenarios. Specifically, the researchers analyzed the interaction between three key variables: product placement on the display, proximity to expiration, and the depth of discounts applied.
One of the most significant findings from the study concerns shelf positioning. When products nearing their expiration date are placed in more accessible areas—for example, at the front of the display—the likelihood of their purchase increases significantly. This finding calls into question the traditional practice of displaying perishable products uniformly, regardless of their expiration date.
However, the effectiveness of display and pricing strategies varies depending on the product category. For slow-perishing products, such as dairy products, the best results are achieved by highlighting older products and applying moderate discounts. Conversely, for categories with rapid spoilage and high waste costs—such as meat and ready meals—it's more effective to emphasize fresher products and use more impactful promotions on products approaching their expiration date.
For products that perish quickly but have a low unit cost, such as bread, the study suggests a different strategy: completely emptying the shelf when new stock arrives can be more efficient than traditional inventory management.
"Retailers don't have to choose between profitability and sustainability," explained Zumbul Atan, professor of supply chain management at Eindhoven University of Technology and co-author of the study. "In many cases, the same decisions that improve profits also help dramatically reduce waste."
The analysis also highlights that even companies that adopt everyday low price (EDLP) strategies, avoiding frequent promotions – as in the case of Walmart – can improve performance by adjusting product displays, especially when store traffic is unpredictable, an increasingly common condition in contemporary retail.
Finally, the study highlights how adopting dynamic pricing strategies can have a significant impact: on average, this practice reduces waste by 21% and increases gross margin by approximately 3%, opening up new perspectives for more efficient and sustainable management of fresh produce.
