Fighting Food Waste in Retail Stores With Dynamic Markdown of Near-expiration Products

Expiration of food products in retail stores is caused by factors related to store operations, supply chain practices and consumer behavior. In this project, we have worked with a retail chain in its markdown program for product items near their expiration date aiming at improving performance. Challenges consisted in time-consuming operations and inefficient discount setting. Our approach leverages analytics to estimate the stock near-expiration, calculate price-elasticity and recommend optimal discounts on a label-by-label basis. A after a very successful POC the approach was rollout across stores and categories within 6 month and is now responsible to set the discount of over 20M labels every year. The main impacts are: incremental sales of 1.5M€/year, the reduction of shrinkage in 3% and reduction of the store employees’ effort. In this talk we will cover the project motivation, analytical developments and, the operational and technological challenges of deploying the solution.