How do supermarkets like Costco and Wegmans deal with food products that have quicker than normal expiry to prevent as much waste as possible? An example is Wegmans producing pizza dough for customers, but also making their own pizza throughout the day to sell hot by the slice or pie, and cold whole pizzas they sell to customers to be heated up at home. *Not to mention the variety of dough they offer—white, wheat, gluten free; and the pizza varieties on those dough types.*
I know as a society we have a terrible issue with food waste, but how do supermarkets calculate their sales to production ratio enough to make a profit with so many different items expiring on different days?
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They don’t, they test it.
Say they’re gonna sell a new kind of, idk, prepped sushi roll.
They just start with one location, and maybe the make 50 rolls a day for a week. After a week, if they sold all 50 every day they’ll up it to 100 the next week. If those all sell out then they up it again the next week. Or maybe they cut it down if they didn’t sell out.
They do that for weeks at a handful of locations to collect data. Maybe they discover they usually need around 100 on week days, but only 50 on week ends. Or something. They test it for a while and collect all that data.
They then use that data to come up with how they are going to roll it out to all of the stores. Then the individual stores will put it out and also keep track of it themselves. Say one locations finds that they’re never selling out, that location might individually pull back their production.
So those first initial weeks can absolutely see food waste and loss of money, but they use that data to fine-tune what they do in the future to make money.
They have tons of historical data. They track how much food they sell on any given day every single day. From that, you can estimate how much food you will sell _tomorrow_ and prepare that amount.
They also correct throughout the day. If one particular food item isn’t selling as well as you projected it would, you simply make less of it in the next batch. Since the raw ingredients typically have shelf lives of several days, making adjustments like this is relatively easy – you just cook less today and use it tomorrow.
In the case of your pizza example, dough can be frozen for days at a time and thawed fairly quickly. If I’m not selling as much pizza as I thought, I simply thaw less dough and use it tomorrow; if I’m selling more, I thaw more.
There will always be some waste, but places that prepare food cut as much food waste as possible, as waste is directly subtracted from their profits.
First off, stores like Costco, that sell both food and general merchandise, often make little to no money on food. Their food sales are designed to break even, with some “loss leaders” like rotisserie chicken being sold at an extreme loss just to get people in the door. Since people come for their food, and they have to walk to the very back of the store to get their essential food, along the way they pass by the general merchandise. Costco hopes that people will impulse purchase something like clothes that they have to walk past, and that’s where they actually make their profit.
Second, it is absolutely terrible for any store to be out of stock on non-niche items. Many customers will only go to one store, but if the item they absolutely need is out, this may be enough to get them to visit another store. They may end up liking that other store more and never come back. To prevent losing customers, supermarkets will keep a much higher inventory than they think they will sell before the item goes bad, just to ensure that they keep everything in stock.
All this is to say that for prepared foods, supermarkets barely consider waste at all. They often plan to lose money on these products, and they care most about keeping the customers loyal, so they expect to throw away a very significant amount of this food. They will recoup their losses in high margin general merchandise goods to offset the extreme amount of food waste they create. They’re worried about calculating the possibility of running out, they aren’t worried about calculating the perfect amount to put out to limit waste.
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