The management of surplus food in grocery stores : development of a decision model and analysis of total costs

In order to avoid the inefficient and disgraceful phenomenon of surplus food turning into waste, preventing surpluses from arising and defining suitable recovery policies are two pivotal actions that businesses should implement while managing the perishable inventory. Given their economic impact and proximity to end users, retailers are fundamental in determining whether a food supply chain is socially and environmentally sustainable, thus the phenomenon of food losses at this stage deserves special attention. The objective of this study is to explore the trade-off among all the costs associated to the generation and recovery of surplus food in grocery stores. Store managers have to make decisions regarding the food inventory that affect the amount of surplus arising in the point of sale, as well as the portion that will be recovered and kept from turning into waste. Hence, a decision model was designed and implemented in order to assess the economic impact of these levers. The model, which was implemented on an Excel tool, is an innovative operational instrument that can be used to assess the optimal policy to both prevent and manage surplus food, as it was designed following a systemic approach. It enables users to estimate a priori the amount of surplus arising in a grocery store and then collocates the estimates into a framework of the management process, the result of an extensive study of the literature and of the direct observation of a real-life grocery store’s practice. Several scenarios were investigated by executing numerical applications of the model and their results were discussed and compared. The scenario analysis allowed understanding how the total costs of the process vary according to the value of its main input parameters, as well as how context variables affect optimality.