BALTIMORE, Feb. 25, 2026— Grocery retailers may not need new technology—or behavior change from shoppers—to meaningfully reduce food waste. New research in the INFORMS journal Management Science finds that small operational decisions already under a retailer's control, including how perishable items are displayed and when (and how much) they're discounted, can increase profits while reducing spoilage.
The new study takes a close look at perishables with declining quality over time, such as fresh produce, dairy and meat. Using advanced analytical modeling and thousands of simulated retail scenarios, the researchers examined how three factors interact: product display, discount timing and discount depth.
Their conclusion: where a product sits on the shelf matters almost as much as its price. By making small, strategic changes to where items are placed when discounts appear, retailers can increase profits by an average of 6% and cut waste by more than 21%, according to the study.
The findings challenge a long-held assumption in retail: that selling only the freshest items at full price is the safest way to protect margins. Instead, the research shows that smarter display and discounting strategies can deliver a rare win-win, benefiting retailers, consumers and the environment at the same time.
"Retailers don't have to choose between profitability and sustainability," said Zumbul Atan of Eindhoven University of Technology, one of the study's authors. "In many cases, the same decisions that improve profits also dramatically reduce waste."
Food waste is a global problem hiding in plain sight. Roughly 17% of all food produced worldwide is wasted, with retail accounting for a significant share. In the United States alone, up to 40% of food goes uneaten. At the same time, food waste is a major driver of methane emissions and climate change.
When older, soon-to-expire items are made easier to reach, such as by placing them at the front of a display, shoppers are more likely to buy them. Compared with a common industry benchmark where fresh and older items are equally accessible and no discounts are offered, optimizing display and discount decisions led to a 6.01% increase in profit and a 21.24% reduction in relative waste on average.
The study also found that the best strategy depends on the product. Items that deteriorate slowly, like dairy, benefit most from displaying older products more prominently and offering modest discounts. Products that deteriorate quickly and are costly to discard, such as meat or prepared foods, perform better when fresher items are emphasized and discounts are used more aggressively. For fast-decaying, low-cost items like fresh bread, it can still make sense to clear shelves entirely when new stock arrives.
Perhaps most surprising is what the research says about "everyday low price" retailers, such as Walmart, that avoid discounting altogether. Even without changing prices, simply adjusting how products are displayed can reduce waste and improve profitability when customer traffic is unpredictable, which is the reality for most stores.
"For retailers worried that discounts might hurt their brand or cannibalize full-price sales, display strategy alone can deliver meaningful gains," said Dorothee Honhon of the University of Texas at Dallas, a co-author of the study.
Beyond the balance sheet, the implications ripple outward. The research underscores that meaningful gains in both profit and sustainability can come from decisions retailers already control. Small adjustments to shelf design and pricing strategy can yield substantial economic and environmental benefits across food supply chains.
"This research shows that better operations decisions can improve lives in very real ways," said Amy Pan of the University of Florida, one of the study's authors. "It's not about asking consumers to do more. It's about designing systems that work better for everyone."
