Discounts shrinking on near-expiry date food at Estonian supermarkets

Continued inflation over multiple years has led to a surge in purchases of discounted food items nearing their expiration date, which in turn is squeezing the margins on the discounts supermarkets can offer.
Stores usually apply dynamic pricing when determining the discount for food items, with demand, time of day, and the condition and quantity of the product all being variables taken into consideration. In general, discounts on items with a same-day expiry date can range from 25 percent to 70 percent.
In Tallinn's major shopping malls, signage promoting 30-percent discounts during weekday lunch hours is a common sight, whereas the usual all-day rate on same-day expiry products was more like 50 percent.
ERR quizzed several major supermarket chains about consumer activity when buying discounted products, and whether more modest discounts have become the new norm.
Selver uses both 50 percent and 30 percent discounts
Selver's head of business accounting, Kristjan Anderson, said the purchase of discounted products has risen by 30–40 percent compared with 2023. Purchases of promotional items have also risen by about the same amount over the past two years.
Both 30- and 50-percent discounts have been used at Selver for a lengthy period of time, Anderson noted.
"The size of the discount depends on the product's condition, time to sell-by date, and quantity. In considering the average margin on food, even a 30-percent discount results in costs to the company. That said, selling at a 50-percent discount is less costly for the retailer than writing the product off," he said. In addition to economic factors, an increased consumer awareness of food waste is also behind the growing popularity of discounted products, Anderson added.

Most discounted food gets sold, he noted. "It is not possible to state exactly how much of the discounted goods get sold, as the discount is only recorded when the sale gets made. Based on experience, we can state that about four-fifths of products with discount stickers get purchased."
Rimi uses automated system
Rimi Estonia purchasing manager Marilin Jürisson concurred that discounted food products having been disappearing from shelves faster than before.
Since 2022, the size of the discount in Rimi stores has been determined by an automated system which considers factors such as stock levels, time, and consumption. Discounts can reach up to 50 percent, depending on the product category, Jürisson explained.
"We set minimum and maximum possible discounts. Depending on demand and inventory, discount stickers vary from store to store. In stores where interest is lower, a discount will be greater, and in stores where products are snapped up first thing in the morning, the discount will be a bit smaller," Jürisson said. The purchasing manager conceded that using discount stickers ends up being financially loss-making for the chain. "Yes, the losses are smaller than discarding the products or donating to Toidupank, but it is still a significant cost for us," she said.
"For us, selling products with discount stickers is the penultimate solution in dealing with food losses," Jürisson added. "Before that comes a range of internal processes, and the last step is Toidupank. If consumer interest drops, orders for those products also get reduced. If that doesn't help, we will review the selection, remove products from some stores, or, if the majority of stores can't sell a full case within the sell-by period, we remove the product from our range entirely."
About 80 percent of products with discount stickers get sold at Rimi, she noted, with the remainder going to the Toidupank food bank.
Lidl's discount standard is 25 percent
PR spokesperson for Lidl, Kaspar Kütt, also noted that the general rise in food prices and the economic situation have made consumers more aware and price-sensitive, with goods nearing expiry receiving more attention than before.

"We have noticed that customers are price-conscious and consider their purchases carefully. The increased interest in discount offers is a logical outcome of the overall economic situation. For customers, it's not only the discount percentage that matters but the final price and value of the product," said Kütt.
In Lidl stores, the discount percentage for expiring products stands at 25 percent — a benchmark the chain says it has no plans to change.
"We instead give our customers plenty of choice by putting discounted products with the new price out on the sales floor several days in advance, so that customers can enjoy good prices for longer," Kütt added.
Kütt noted that thanks to what he said is an efficient ordering system and dynamic pricing, Lidl manages to sell off the vast majority of its discounted food.
Lidl's main partner in reducing food waste is also Toidupank, which it donates unsold food to.
"This cooperation ensures that quality food reaches those in need and that waste is kept to a minimum. So practically all consumable food either ends up in the customer's shopping basket or reaches those in need via Toidupank," Kütt continued.
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Editor: Andrew Whyte