Refresh retail: Value of near-expired food commercialization

This study addresses the strategic dilemma faced by fresh-food retailers in combating food waste through near-expired food commercialization, comparing direct and outsourced schemes. While both approaches effectively reduce waste, their advantages remain unclear under demand uncertainty. We develop a two-period dynamic game model to elucidate the commercialization process. Our findings indicate that, despite differing operational decisions, both schemes can enhance sales and profitability when the quantity of near-expired food is low. The direct scheme primarily optimizes economic returns from near-expired food, while the outsourced scheme protects the fresh food market. The choice of the preferable scheme largely hinges on the quantity of near-expired food generated. In addition, sensitivity analyses of key supply and demand parameters reinforce the robustness of our findings and provide new insights under specific conditions, contributing to the literature and offering actionable strategies for practitioners managing near-expired food commercialization.