Less food waste: Supermarkets can save money by giving surplus food away

Food waste has been a focus for years, yet the problem in Denmark remains significant. Each year, the retail sector discards more than 100,000 tonnes of food, even though a substantial share is still fit for consumption. But food waste is not only unsustainable – it is also costly for retailers. In addition to the lost revenue from unsold goods, disposing of food typically involves waste handling costs.

For the first time, a University of Copenhagen analysis has produced detailed figures on retailers’ financial incentives to sell, donate or discard surplus food. Today, at least half of all surplus food in retail is thrown away.

Although a central part of the analysis is based on data from a limited number of retail chain stores, the results point in a clear direction: in most cases, it is more expensive to discard food than to give it away – and retailers can often even make money by acting earlier. 

“There is a widespread perception that donating surplus food is mainly about charity. But our figures show that, in many cases, it is also the most financially sensible option for retailers once they have given up hope of selling the products,” says Jørgen Dejgård Jensen, Professor at the Department of Food and Resource Economics, University of Copenhagen and author of the study

Early price reductions deliver the greatest returns

The analysis shows that early price reductions in-store are, on average, the most profitable strategy:

“As long as the products still have some shelf life left, it makes most sense to sell them at a discount. If retailers act in time and reduce prices a few days before the expiry date, they can often turn a potential loss into a real financial gain. In fact, a price reduction of around 15% is typically enough to ensure the products are sold,” explains Jørgen Dejgård Jensen.

According to the study data, most product groups generate a net financial gain of around €0.3–0.8 per kilo when prices are reduced, because more items are sold instead of ending up as waste.

For fresh meat, fish and processed meat products, the benefit can be even higher – in some cases exceeding €1.3 per kilo.

Only liquid dairy products and dry goods rarely generate a surplus through price reductions.

Donation costs less than disposal

When products are too close to their expiry date to be sold, the analysis shows that it is more cost-effective in most cases to donate them to organisations that redistribute food to socially and financially vulnerable people rather than discarding them.

While it typically costs retailers around €0.27–0.36 per kilo in waste and handling costs to dispose of food, donation costs on average about €0.14–0.23 per kilo. This represents a saving of approximately €0.10–0.20 per kilo for most product groups. 

“From the store’s perspective, it is often about choosing the least costly solution. And in most cases, donation is cheaper than disposal. In practice, there is little difference between putting food into a container for collection, for example for biogas production, and placing it on a pallet for a food redistribution organisation to collect,” says Jørgen Dejgård Jensen.

According to the researcher, the study overall shows that retailers’ choices have major implications – both financially and for society:

“Reducing food waste and improving profitability are not conflicting goals. On the contrary, our study shows that the two can go hand in hand,” the professor concludes.

“I hope this will encourage retailers to look at whether they could manage surplus food more smartly. Some products may be thrown away simply because staff are not aware that a better option exists. Of course, this requires training so employees know what should go where.”