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RECYCLING & WASTE MANAGEMENT WASTE NOT, WANT NOT The need for action against food waste is sparking a mini revolution in the grocery retail


supply chain, as organisations increasingly realise that fixing waste means understanding the true cost, and the root cause, suggest Guy Cuthbert, CEO at Atheon Analytics.


Food waste has become a globally hot topic in recent years and a major commitment for most UK retailers through the Courtauld 2025 initiative. Indeed, UK grocery retail leads the way in managing waste, not least through its role in helping consumers manage – even own – waste in the home.


Outdated thinking Retailers have been gathering and assessing waste data within their businesses for over 20 years; monitoring and acting on waste, damages, and reduced-to-clear rates as part of their range and assortment decisions in order to influence the choice that they offer to shoppers. Unfortunately, understanding the true cost of waste and the drivers which impact it - still proves complex, time- consuming and worryingly opaque to many retailers.


The cause is a combination of disconnected data silos and disconnected, siloed thinking used to power understanding and decision-making. Whilst all grocery retailers determine waste cost as a percentage of sales,


36 | TOMORROW’S FM


and can measure the value of waste versus budget, their ability to assess the true cost and its effect on product margin remains elusive for most.


Indeed, many retailers assess and manage their waste almost exclusively on the infamous ‘Waste Budget’, which (in common with many such budgets) is often seen as an acceptable target rather than the worst acceptable case. Store managers relax when a new range is launched with a ‘sufficient’ waste budget to ensure that they can stock – i.e. overstock - a range to attract the shopper’s eye without worrying about the impact of reduced-to-clear on operating margin. Yet gross margin and operating margin are very definitely impacted by the simplistic, aggregated approach to waste that such (sub)category budgets encourage.


This sort of thinking is outdated. We need to use information in a more responsible, effective and actionable manner. Instead of meeting a waste budget, we should be beating it consistently with the aim of tending towards zero waste. We should be identifying the impact


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