Albert Heijn Experiments with Dynamic Discounting

As shelf life comes to an end, prices are further adjusted downwards. With this, Albert Heijn hopes to significantly reduce waste. An algorithm considers shelf life, location, bonus offers, weather conditions, historical sales and in-store stock. This will result in a discount of 10 to 60 percent, after which the algorithm will adjust the amount on the electronic price tag on its own. The trial will run for two months and, if successful, the system may be extended to a hundred other stores.

In the Netherlands 1.8 to 2.5 billion kilos of food are wasted annually in the chain from grower or supplier to supermarket and consumer. The latter throws an average of 41 kilos a year into the wastebasket. Supermarkets are responsible for 4 percent of the annual waste.

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