Albert Heijn to combat food waste with "dynamic discounts"

Supermarket chain Albert Heijn plans to step up its fight against food waste with a new system called "dynamic discounts". This involves an electronic price tag that gives customers a bigger and bigger discount the closer a product comes to its sell-by date, NOS reports.

Over the past year, Albert Heijn threw away 1 percent of unsold products because they exceeded their expiry date. That amounts to 63 million kilograms of wasted food.  The supermarket chain hopes that the dynamic discounts system can help reduce this.

An experiment with dynamic discounts started in an Alberth Heijn branch in Zandvoort on Tuesday. Customers of this store will see electronic price tags on perishable goods, which will show a product's original price and its discounted price. The closer the product gets to its sell-by date, the higher the discount.

The system automatically calculates the best discount, between 10 and 60 percent, based on various factors including the weather conditions, the stock of the product in the store, the historical sales trend, and whether the product is on sale. 

The experiment in the Zandvoort store will last two months. If the technology works well, and customers respond positively to it, Albert Heijn will role it out to more stores.

Throwing away food has long been a thorn in the eye of supermarkets trying to be more sustainable. But it is a difficult problem to solve, according to Albert Heijn. "Do you sell 'no' to someone who still wants to buy fresh bread at 7:30 p.m., or do you still have it on the shelves with the chance that you won't sell it?

For this experiment, Albert Heijn is working with Wasteless, originally an Israeli startup that is now active around the world in the field of dynamic pricing. "The first results we now have from a supermarket chain in Italy where they work with our algorithm are promising: with products with this form of pricing, we see a turnover increase of 25 percent and 89 percent less food waste", Ralph de Vries, responsible for Wasteless' Dutch activities, said to NOS.