INFORMS Journal Manufacturing & Service Operations Management Study Key Takeaways:
- An increase in the number of stores directly decreases consumer waste due to improved access to groceries.
- Too many stores could increase store waste due to distribution of inventory and price competition.
- The optimal solution to reduce food waste is to increase the number of stores in a given area, but not too much. The perfect balance will ensure a drop in food waste.
CATONSVILLE, MD — February 12, 2020 — Food waste is a big problem in the United States. According to the US Department of Agriculture, food waste is estimated at between 30-40 percent of the food supply. New research in the INFORMS journal Manufacturing & Service Operations Management finds that increasing the number of grocery stores in certain areas can drastically decrease waste.
The study, "Grocery Store Density and Food Waste," was conducted by Elena Belavina of Cornell University and examined grocery industry, economic, and demographic data, finding that store density in most American cities is well below the optimal level, and modest increases in store density substantially reduces waste.
The research finds that areas like Manhattan have a lot of grocery store options and a lot of people. A high number of stores in this area reduces food waste by consumers and retailers. With more stores, households have to travel less to visit a store, which means consumers make more frequent trips with smaller purchases per trip. In turn, these smaller basket sizes imply less food waste because it's less likely the food will expire before it's used.
Thus, increasing grocery store density allows households more flexibility to decide how often and how many groceries to purchase to accommodate their needs. The author found that in a city like Chicago, results show even modest increases in store density can lead to substantial decreases in food waste.
"Just three to four more stores in the Chicago area can lead to six to nine percent reduction in waste. This is accompanied by a one to four percent decrease in grocery expenses for households," said Belavina, an associate professor in the SC Johnson College of Business at Cornell. "What's more, increasing the number of grocery stores in a given area also works to combat emissions, while reducing consumer food expenditures, achieving two goals that are often considered competing."
"The key is finding the right number of stores for each area. An increase in the number of stores decreases consumer waste due to improved access to groceries, but too many store options increase retail waste due to relocating inventory, price competition, and diminished demand by customers."
- This press release was originally published on the INFORMS website