Ahold Delhaize’s Albert Heijn chain in the Netherlands is now testing a tech-enabled dynamic discounting scheme intended to reduce food waste.
The program is now in place at an Albert Heijn store in Zandvoort and is being utilized to automatically reduce prices on chicken and fish products based on their sell-by date, with a higher discount for items that need to be sold soonest.
An algorithm developed by Albert Heijn takes into account various factors to calculate the best price to eliminate unsaleable products and thus reduce waste, the retailer said. These factors include location, bonus offers, weather conditions, historical sales performance and in-store stock. The products are accompanied by electronic price tags with two prices: the regular price and discount at a specific expiration date.
Albert Heijn was advised for the test by Wasteless, a Tel Aviv-based company that has developed a machine-learning pricing engine enabling dynamic pricing on based on a series of variables.
According to the Food and Agriculture Organization of the United Nations, food loss and waste costs roughly $680 billion in industrialized countries and $310 billion in developing countries.
As part of its sustainability goals Ahold Delhaize said it aims to eliminate half of the waste across the food chain by 2030. The company is also exploring several areas where artificial intelligence can improve the shopper experience and solve problems for food retailers.