Research on Dynamic Pricing and High-Frequency Replenishment-Based Intervention Strategies for Supermarket Near-Expiry Food Waste
Perishables with three or fewer days of shelf life, such as fresh-cut fruit, salads, bakery items, and fresh milk, suffer from substantial waste in supermarkets in Hong Kong. In the past, inventory orders were made every morning based on sales the day before. This method often resulted in inadequate inventory levels and waste. This study proposes an actual intervention through dynamic pricing and high-frequency replenishment. The proposal includes the following: the store replenishes its perishables three times per day; the pricing structure will be based on a “price decreases as the day goes on with purchasing limits” discount rule; a safety stock of 1.05 in place; and the use of electronic shelf labels for ensuring automatic pricing changes. The proposal is divided into a four-week pilot project plan. Each step will provide information on how to gather data from the perspectives of customers, employees, and the community. This paper includes assumptions, future plans, ethical issues, as well as innovations of importance. The primary innovation is the use of behavioral economics in everyday operations in the supermarket to create a “laboratory.”
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