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WHY FOOD DISCOUNT STICKERS MAY BE A THING OF THE PAST

Published
30 November

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Image source, Getty Images
Image caption,
Fans of hunting out food with discounted stickers may soon be disappointed, as
the yellow labels disappear
By MaryLou Costa
Business reporter


Polly Arrowsmith is a savvy bargain shopper, and knows exactly when her three
local supermarkets make their daily price markdowns.

She estimates that hunting out the yellow discount stickers saves her hundreds
of pounds a year.

"There is no doubt I get a dopamine hit when I get a yellow label food item,"
says London-based Ms Arrowsmith. "It is a small hit, but I do acknowledge the
moment of joy."

That daily ritual of pocketing a yellow sticker saving could soon be coming to
an end. That's because supermarkets are adopting dynamic pricing, controlled by
artificial intelligence (AI) software.

It involves digital price tags that are displayed either on the shelf below the
food items, or on high-tech stickers attached the product itself.

These prices are automatically, and wirelessly, updated by the AI when a
particular item approaches its sell by date.



The AI also examines how much stock the store is holding of that item and demand
for it at the same time in previous years.

So there is no need for members of staff to walk around the fresh food aisles
with a sticker gun towards the end of the day.

Image source, Polly Arrowsmith
Image caption,
Ms Arrowsmith admits she will miss the yellow stickers

Such AI-driven dynamic pricing is already a reality in mainland Europe, as
grocery retailers such as DIA in Spain, Iper in Italy, Metro in Germany, and
Hoogvliet in the Netherlands are rolling out the technology.

They are all using a system provided by Israeli firm Wasteless. "Our model
gauges the risk of a certain item expiring on the shelf rather than being sold,
and makes the decision as to whether a markdown is required or not," says David
Kat, the firm's senior vice president of business development.

"The data we help generate can also help retailers better understand how to
manage stock replenishment and avoid over-ordering. So we're actually turning
the current food waste problem into an opportunity."

Wasteless says it is now in "advanced negotiations with three household name
British retailers", with the aim of rolling out its system in the UK in the
first half of next year. It claims that it can cut supermarkets' food waste by
more than a third.



Meanwhile, Asda recently trialled digital price tags from SES-Imagotag. This
French tech firm says it is now supplying its technology to around 350 large
retailers across Europe, Asia and the US.

Elsewhere, UK firm Displaydata's system is being used by German supermarket
chain Kaufland. And Swedish player Pricer recently launched in its home market
with grocer ICA.

Such dynamic pricing could be worth an additional 10% to a retailer's fresh food
revenues, according to one study. This is because it will help it to sell items
that would otherwise have to be binned.

Currently UK supermarkets and other food retailers are responsible for around
300,000 tonnes of food waste per year, one report found.

Image source, Wasteless
Image caption,
Digital price tags are already common in some countries in mainland Europe

Matt Wills is the co-founder of a firm called Acumen, which advises brands on
how much they should sell their products for. He warns that there are potential
disadvantages to dynamic pricing.

"With a lack of clarity on what the reference price is, consumers might not
realise they are getting a deal at all," he says. "This could also lead to
unpredictability of prices, causing added complications for people on a budget
squeeze, if items are seen to be continually changing in price."



Mr Wills also fears that some prices could actually go up. "There's also a risk
of price discrimination, with products that are more popular in certain stores
ending up having prices pushed up because of higher demand in that area," he
says.

"So, rather than helping consumers, AI-driven pricing could have adverse
effects, for example seeing pensioners pay more for certain products because
they live in a predominantly retired town with a similar consumer demographic."

The key, Mr Wills believes, will be for retailers to have strict guidelines and
governance to ensure they can offer the benefits that dynamic pricing can bring,
whilst ensuring AI and algorithms don't create unintended negative consequences
for shoppers.



Read additional stories on artificial intelligence



But Sabrina Benjamin, a London-based retail expert and founder of business
technology consultancy Authentic Branches, is confident the benefits of
AI-driven digital pricing in supermarkets will outweigh any negatives.

"Digital price tags are definitely more sophisticated than the yellow sticker
approach," she says. "The flexibility it creates and the ease to change prices,
means the retailer can provide greater benefits and discounts to the consumer...
and influence traffic to their store."

Whether shoppers will welcome the change - and the disappearance of yellow
sticker discounts - is another question, but Ms Benjamin believes they'll be won
over by the price reductions they receive.

Ms Arrowsmith admits she will miss the yellow stickers that have become part of
her shopping routine. However she also says she wants to see less food going to
landfill. "I'm happy to forgo really cheap pricing," she says.


RELATED TOPICS

 * Retailing
 * Artificial intelligence
 * Supermarkets
 * Food waste





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