The study, led by Zumbul Atan of Eindhoven University of Technology, Dorothee Honhon of the University of Texas at Dallas, and Amy Pan of the University of Florida, draws on analytical modeling and thousands of simulated retail scenarios. It examines how display position, discount depth, and timing interact to shape customer purchasing decisions.
The findings suggest that operational choices already within a store’s control can materially influence both financial performance and waste outcomes. In an environment defined by thin margins, higher disposal costs, and growing ESG scrutiny, these results point to a practical lever that does not rely on new technology investments.
Conventional practice has often favored placing the freshest inventory at the front of displays to protect brand perception and maximize full-price sales. The research challenges this assumption. When older, near-expiry items are made more visible and accessible, customers are more likely to purchase them.
Compared with a benchmark scenario in which fresh and older items are equally accessible and no discounts are applied, optimized display and discount strategies improved profits by an average of 6.01% and reduced relative waste by 21.24%. The modeling indicates that shelf placement can influence purchasing behavior nearly as strongly as price adjustments.
Importantly, the analysis suggests that profitability and sustainability do not necessarily sit in opposition. In many cases, the same display strategies that improve margin performance also reduce spoilage, reframing waste reduction as an operational efficiency issue rather than solely a compliance or corporate responsibility initiative.
The study also highlights that optimal strategies vary significantly by product type. Perishables differ in deterioration speed and disposal cost, and display and discount decisions should reflect those characteristics.
For slower-deteriorating products such as dairy, prominently displaying older inventory combined with moderate discounts generated the strongest performance improvements in the simulations. In contrast, faster-decaying and higher-disposal-cost categories, including meat and prepared foods, performed better when fresher items were emphasized and discounts were used more assertively to clear aging stock. For fast-decaying, low-cost items such as fresh bread, clearing shelves entirely when new inventory arrives may remain economically rational.
This variation underscores the limits of uniform policies such as rigid first-in, first-out display rules or blanket markdown approaches. The research suggests that precision at the category or SKU level can deliver stronger financial and environmental outcomes than deeper discounting alone.
The findings are also relevant for everyday low price operators that traditionally avoid dynamic markdown strategies. The modeling indicates that even without discounting, retailers can improve profitability and reduce waste by adjusting product placement, particularly in environments with volatile customer traffic. For operators concerned about brand erosion or cannibalization from markdowns, display strategy alone may offer measurable gains.
At a broader level, the implications extend beyond individual store performance. An estimated 17% of global food production is wasted, with retail contributing a meaningful share. In the United States, up to 40% of food goes uneaten, driving methane emissions and avoidable supply chain costs. The study suggests that operational design decisions made at the shelf can influence these outcomes at scale.
For grocery leaders balancing cost pressures, supply chain variability, and sustainability targets, the message is straightforward: shelf management remains an underused but quantifiable lever for improving both margin and waste performance.
