The real lowdown on markdowns:
current practices and smart solutions

Optimize markdown processes, reduce food waste, and grow margins.


There are many approaches to markdowns and retailers must identify the one that works for them based on their budget, processes, and culture. The overarching goal should be to fine-tune a markdown strategy that unlocks the many benefits at hand but most especially drives a reduction in surplus food.

With 12% of retailers not leveraging expiry-based discounting on their products at all, and 9/10 of those who do are not leveraging dynamic markdown technology, there is a huge opportunity for retailers to drastically reduce the amount of surplus food they waste every year.

This opportunity is abundantly clear when you consider that food waste contributes 8% of the world’s total greenhouse gas emissions5, with the total bill of wasted food $680 billion3. The simple truth is that retailers should be doing everything they can to reduce the amount of surplus food they have – both from an environmental and profit perspective.

The retail landscape is shifting, and players must adopt the mindset of the new generation of e-commerce specialists and fight for every incremental inch of margin. New approaches to markdown that empower store managers and associates to do their job more effectively will help in this mission.

As the retail landscape continues to alter, fresh food is becoming the key battleground in which retailers will be able to differentiate themselves from their competition. As a result, the pressure on the perishable food supply chain will only rise, meaning the need for an effective and comprehensive markdown strategy is rapidly growing.

  1. https://wrap.org.uk/
  2. Methodology: This research involved Retail Insight visiting 658 stores in two regions, collecting over 9,000 data points. The regions were North America (USA and Canada) and Europe (UK, Benelux, DACH, Nordics) and the data points for the exercise were defined as a photo of the markdown item, as well as the old and new price across 5 different store categories; produce, dairy and eggs, deli, meat, and bakery.
  3. https://www.unep.org/thinkeatsave/get-informed/worldwide-food-waste
  4. https://www.igd.com/
  5. https://www.fao.org/publications/card/en/c/7fed720c-18e6-4be4-83d2-385b05b79ace/
  6. https://www.retailgazette.co.uk/blog/2021/05/retailers-food-waste-covid19-karma-toogoodtogo/
  7. Internal Retail Insight research

Get in touch

To discuss the findings in this report and learn more about Retail Insight’s solution for food waste management contact info@retailinsight.io.
Tom Coe

Written by Tom Coe

Tom is the Project Manager to the CEO at Retail Insight. A former NCAA distance runner, he now uses his competitive passion in everything he does at Retail Insight, with a particular focus on strategy and partnerships. He is an MBA graduate from Tulane University and is a Business Management graduate from the University of Birmingham.

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