Price-sensitive and sustainably-minded shoppers are pushing retailers to address food waste reduction and improve markdowns, according to the latest research from Retail Insight, the leading provider of in-store execution software.
Original research of over 1,000 UK shoppers by Retail Insight showed that 70 per cent believe that, rather than addressing ‘mainstream’ sustainability efforts, such as recycling, retailers should focus their ESG sustainability efforts on food waste reduction. A further 70 per cent felt there wasn’t currently enough focus on food waste reduction in retailers’ sustainability goals, rising to 74 per cent for both Gen Z and Millennial consumers.
More than seven in ten (72 per cent) shoppers felt that retailers and consumers need to work more collaboratively to shift the dial on climate change, rising to 80 per cent of Millennials. This call for collaboration highlights the key role food waste management plays; retailers want to waste less and sell more, and consumers want access to good value while being sustainability conscious.
Three quarters (74 per cent) of shoppers polled by Retail Insight said they were also actively trying to cut down food bills, with two-fifths (38 per cent) now only buying reduced-price groceries, rising to 55 per cent of Millennials. This underscores the role markdowns can play in making household budgets work harder.
As well as exhibiting high price sensitivity and wanting to cut down on the cost of food, consumers also want to reduce the impact of food waste. Over two-fifths (44 per cent) are now motivated to buy marked-down goods to stop food from going to landfill, while a further half (47 per cent) purposefully don’t overbuy groceries to prevent food waste.
With shoppers wanting to waste less and purchase more marked-down groceries, retailers can drive increased sales through reduce to clear (RTC) processes, creating additional revenue while preventing waste, Retail Insight, noted. However, many retailers are missing out on this opportunity through ineffective execution.
According to Retail Insight’s research of 124 retailers, 12 per cent of retailers globally are not implementing any markdown processes within their stores, while in the UK, only 5 per cent of markdowns are dynamic and data-driven. This means that retailers are missing out on the opportunity to increase sell-through, recover revenue, and reduce the amount of food wasted.
“Strategic markdowns are not just a tool for clearing inventory; they are also hugely important in reducing food waste whilst maintaining healthy levels of profitability. However, they remain an overlooked opportunity, with many retailers choosing to do nothing or simply relying on basic predefined values, usually set at 25 per cent, 50 per cent, or 75 per cent. This leads to poorly timed, over-discounted markdowns, often taking no account of the volume to clear, that eat into margin and don't then generate the sell-through needed to shift the stock,” Paul Boyle, CEO of Retail Insight, commented.
“Retailers should instead look to harness their existing store data to create more effective dynamic pricing systems that consider historic sales, inventory volume, seasonality, and more. In doing so, they maximise the opportunity to drive sales and reduce waste, while offering value to customers.”
WasteInsight, from Retail Insight, empowers retailers to reduce food waste through data-led actionable insights that support their entire waste journey. From better expiration date management and food safety alerts to dynamic markdown pricing, assortment optimisation, and donation routing, the platform allows retailers to sell more and waste less while meeting shoppers' evolving priorities.
