How to Reduce Food Waste in Your Grocery Store: 6 Strategies

It's Monday morning and you're pulling yogurt, bagged salad and a tray of chicken thighs off the shelf because the dates ran out over the weekend. Every one of those items was paid for, received, stocked and refrigerated. Now it's a cost.

To reduce food waste in a grocery store, stop over-ordering first, then sell short-dated stock before it expires, and only then donate or compost what's left. In practice that means six habits: first-expired-first-out rotation, tiered markdowns, a donation partner, composting, demand-based ordering and turning surplus into prepared foods. Each one recovers money you've already spent.

Key takeaways

• ReFED estimates that 29% of the US food supply went unsold or uneaten in 2024, with surplus food worth $381 billion.
• Date label confusion accounts for nearly half of food waste at the retail stage, according to ReFED, so clear rotation and markdown rules matter.
• In a Champions 12.3 analysis of 1,200 business sites, half saw a return of 14 times or more on their food waste reduction investments.
• The cheapest waste to fix is the waste you never order, so ordering from real sales data comes before donation or composting.
• Donations made in good faith are protected from civil and criminal liability under the Bill Emerson Good Samaritan Food Donation Act, except for gross negligence or intentional misconduct.

How much food does a grocery store waste?

Food waste is one of the biggest hidden costs in grocery. The USDA estimates that 30% to 40% of the US food supply is wasted, based on retail and consumer-level losses. ReFED, a national nonprofit that tracks food waste data, says 29% of the 240 million tons in the US food supply went unsold or uneaten in 2024, and that surplus food was worth $381 billion.

Your own number is the one that matters. As an example, if a store doing $3 million a year throws out just 2% of its sales value, that is $60,000 of product bought, handled and binned. Run that math with your own sales and a rough waste estimate from a two-week log, and you'll know how big the prize is.

Where does grocery store food waste come from?

Grocery waste rarely has one cause. Before you change anything, spend two weeks logging every item you throw out, with the department and the reason. The pattern usually points to a few culprits:

1. Over-ordering. Orders based on habit or a supplier rep's suggestion, not on what actually sold.
2. Poor rotation. New product gets stocked in front, older product expires in the back.
3. Date label confusion. ReFED reports that date label concerns account for nearly 50% of food waste at the retail stage. Staff and shoppers often treat a "best by" date as a safety deadline.
4. Receiving and handling damage. Crushed cases, broken cold chain and product left on the dock.
5. Department-specific spoilage. Produce, meat and the deli each spoil differently, so a fix that works in dry grocery may do nothing at the deli counter.

Strategy 1: How does FEFO rotation reduce grocery waste?

FEFO (first expired, first out) means the product that expires soonest goes to the front and sells first, even if it arrived later. FIFO (first in, first out) only looks at arrival order, which fails when suppliers ship lots with different shelf lives.

Here's a hypothetical example. A dairy delivery on Tuesday expires in 14 days. Thursday's delivery expires in 7 days. Under FIFO, Thursday's product goes behind Tuesday's and may expire unsold. Under FEFO, Thursday's product goes in front.

How to set up FEFO:

1. Capture the expiration date at receiving, not on the shelf.
2. Mark the date on the case or shelf tag in large, color-coded print.
3. Train every stocker to check dates before facing product.
4. Pull a short-dated report or walk the coolers daily for the departments with the most waste.

Strategy 2: When should you mark down near-expiry food?

Dynamic markdowns turn product that would be thrown out into cash. The trick is timing: start early enough that the item still sells, but not so early that you cannibalize full-price sales.

A simple tiered schedule many grocers use as a starting point:

As an example, a $5.99 package of meat sold at $2.99 still brings in $2.99. The same package in the dumpster brings in nothing and adds to your disposal bill. Track which items hit markdown every week. If the same cheese is always on the reduced shelf, you are over-ordering or overpricing it.

Strategy 3: How do grocery stores donate unsold food safely?

Not every item can be sold, but much of it can still be eaten. Food banks and food rescue groups, including Feeding America's network, pick up safe, unsold product from retailers.

Under the Bill Emerson Good Samaritan Food Donation Act, donors who give food in good faith to a nonprofit organization are protected from civil and criminal liability, except in cases of gross negligence or intentional misconduct. Ask your accountant if your donations qualify for a tax deduction, and check with your state or local health department about handling rules for donated perishables.

Donation also gives you something to talk about. Shoppers notice when the store down the street feeds people instead of filling dumpsters.

Strategy 4: What should you do with food you can't sell or donate?

Trimmings, spoiled produce and unsafe items still don't have to go to landfill. Common options include:

• A municipal or private commercial composting service.
• A local farm that accepts suitable scraps for animal feed, where your local rules allow it.
• Anaerobic digestion facilities, which some larger regions offer for food waste.

Ask your hauler how pricing works for organics versus regular trash. If diverted waste is cheaper to haul, the savings show up on the next invoice.

Strategy 5: How does better ordering prevent food waste?

The most effective waste reduction happens before the truck arrives. Every case you don't over-order is a case you never have to mark down, donate or compost.

How to order closer to real demand:

1. Pull weekly unit sales for your perishable items from your POS, not from memory.
2. Set a par level for each item based on average sales plus a small safety buffer.
3. Order up to par, adjusting for holidays, weather and local events.
4. Compare what you ordered with what you sold and what you threw out every week.
5. Shrink order sizes or ask for more frequent deliveries on items that keep expiring.

For a deeper walkthrough of fresh departments, see our guide to grocery inventory for perishables and produce.

Strategy 6: Can you turn surplus groceries into prepared foods?

Turning surplus into prepared food is one of the most creative ways to cut waste, if you have a kitchen or deli. Overripe bananas become banana bread. Extra tomatoes become house marinara. Slightly bruised vegetables go into soup.

Upcycling only works if you spot the surplus early, while the product is still good. It also needs the right permits and food safety practices for prepared food. Our guide to adding a prepared foods section covers what that involves.

Is reducing food waste worth the investment?

Reducing food waste usually pays for itself. Champions 12.3, a coalition of leaders working on the UN target to halve food waste, analyzed 1,200 business sites across 700 companies and found that nearly every site saw a positive return, and half saw a return of 14 times or more on their investment.

The cheapest steps come first. A waste log, FEFO rotation and a markdown schedule cost staff time, not capital. Better ordering is next. Donation and composting handle what's left.

How ShelfPerks helps grocery stores cut waste

The six strategies above work with a clipboard, but they get easier when your inventory system does the remembering. ShelfPerks inventory management is part of what ShelfPerks calls a Store Operating System, which keeps point of sale, inventory, purchasing and suppliers in one setup.

• Expiration reports and alerts (Plus and Premium) flag products approaching their dates, so you can mark down, donate or move them to the kitchen in time.
• AI-based and suggested purchase orders (Plus and Premium) help you order closer to real demand.
• Promotions let you set up markdowns at the register instead of hand-writing stickers.
• Real-time analytics show what is actually selling, by product.

The Plus plan is $99.95 per month billed annually ($119.99 billed monthly). See the pricing page for every plan. If waste is eating your margin, try ShelfPerks with a 14-day free trial of Premium features, no credit card required.

Frequently asked questions

What is the fastest way to reduce food waste in a grocery store?

Start a two-week waste log that records every discarded item, its department and the reason. Then fix rotation with first-expired-first-out stocking and add a tiered markdown schedule for short-dated products. These steps cost staff time rather than capital.

What is the difference between FIFO and FEFO?

FIFO (first in, first out) sells the oldest delivery first. FEFO (first expired, first out) sells whatever expires soonest first, even if it arrived later. FEFO prevents waste when suppliers ship lots with different shelf lives.

Are grocery stores liable for food they donate?

Under the Bill Emerson Good Samaritan Food Donation Act, donors who give food in good faith to a nonprofit organization are protected from civil and criminal liability. The protection does not cover gross negligence or intentional misconduct. Check with your local health department about handling rules for donated perishables.

Does reducing food waste pay off for a business?

Usually, yes. Champions 12.3 analyzed 1,200 business sites and found that nearly every one saw a positive return on food waste reduction, and half saw a return of 14 times or more.