Portuguese food retailer Sonae MC has implemented an analytical model developed by Portuguese consultancy LTPlabs to cut food waste.
The model calculates the probability of disposal of each product, defining the best discount to apply to products approaching the end of their shelf life, thus promoting consumption and avoiding food waste, according to the retailer.
The system is being implemented in all Continente, Continente Modelo and Continente Bom Dia outlets.
Probability Of Sale
The tool calculates the probability of sale of each product, in each store, at a variety of different prices, thus estimating the sell-out rate of a certain item.
The model takes into account the financial and performance data of the product and operational data of the store, to determine what percentage of discount is recommended to promote consumption, thereby offering a more competitive price to the consumer.
Parameters To Consider
To determine the best price, three relevant parameters are taken into consideration: the impact of the price on the margin/sale and sales of the item in question; the influence on demand for other items; and the loss due to breakage, shelf life, or the commercial value of the item.
The entire process is carried out based on the existing sales history, allowing managers to establish the product’s disposal objective.
According to Luís Guimarães of LTPlabs, fresh food is another area in which this tool can be of importance, as the category usually has a short shelf life, accounting for a higher rate of waste.
The new analytical model is just one of the latest in a series of initiatives by Sonae MC to combat waste generated throughout the chain.
Recent data unveiled that Portuguese consumers waste one million tonnes of food annually.
© 2023 European Supermarket Magazine – your source for the latest technology news. Article by Branislav Pekic. Click subscribe to sign up to ESM: European Supermarket Magazine.
