Let’s rewind a few years and revisit the approach of market leader Albert Heijn. Products, especially fresh items, nearing their expiration date were placed in a bancarella (a refrigerated display table) with a red-and-blue sticker indicating a 35 percent discount. 

That all changed in October 2022. Albert Heijn introduced electronic shelf labels. Now, when a product nears its expiration date, the discount is displayed directly on the electronic shelf label. These items are no longer moved to a bancarella; they remain in their designated refrigerated sections. Most importantly, Albert Heijn implemented dynamic discounting, where the discount varies per product and per time of day.

If a product still does not sell, it is removed from the shelf and may be repurposed through “AH Overblijvers,” Albert Heijn’s own version of Too Good To Go. While Too Good To Go collaborates with supermarket chains to help them sell surplus products at steep discounts, Albert Heijn developed its own alternative. According to Eelco Hos and Bart Fischer, this move makes sense. Supermarkets working with Too Good To Go not only sell products at a high discount but also have to pay a substantial fee to the platform. However, Albert Heijn already has millions of app users, so it made more sense for the company to launch its own initiative to combat food waste. 

Reducing Waste While Maximizing Profit

The main goal is to reduce food waste, but it is also about minimizing shrinkage costs and maximizing revenue. As supermarkets increase their assortment of fresh products, the risk of expiration and waste grows. If products must be discarded, supermarkets lose the entire retail price. It is far better to sell them at a discount, generating some revenue and margin while ensuring the food is consumed rather than wasted.

Retailers recognize that successfully reducing shrinkage directly impacts their profitability. Every unsold item represents lost revenue.

The Rise of Dynamic Discounting Solutions

Over the years, several companies have introduced solutions to tackle shrinkage, typically using a tiered discount system based on proximity to the expiration date.

  • In 2014, the Swedish company Whywaste, now Upshop following an acquisition, pioneered this approach.
  • In 2017, Wasteless entered the market.
  • Albert Heijn later developed its own system.
  • Other supermarkets, like Hoogvliet, ran trials in 2023 across three stores.

Boon Food Group Joins the Trend

In December 2024, Boon Food Group announced it was implementing dynamic discounting in its three retail formats:

  • Boon’s Markt
  • Boon’s Dagmarkt
  • MCD

Following a successful test phase with Upshop’s Markdown Optimization in three stores, Boon is rolling out the system chain-wide, first in company-owned stores and then to franchised locations, depending on whether franchisees choose to participate.

Boon’s Approach: Manual Sticker Discounts

Unlike Albert Heijn, which uses electronic shelf labels, Boon takes a different approach. Instead of displaying discounts electronically, employees print stickers with optimized discounts and apply them to individual products. 

Bart Fischer, who was unaware that Boon lacked electronic shelf labels, asked: “How does Boon handle this then?” 

Eelco Hos explained: “At Albert Heijn, the optimal discount is automatically calculated and displayed on the electronic price tag twice a day. However, Boon does not have electronic labels. Instead, employees check shelves using an app that tracks expiration dates and notifies them when a discount sticker is needed.”

This manual system still captures about 80 percent of the potential benefits of Markdown Optimization. The remaining 20 percent is achieved through electronic shelf pricing, like Albert Heijn’s system.

The Science of Markdown Optimization

Markdown Optimization is a balancing act. The goal is to preserve as much profit as possible while maximizing the chance of selling the item before it expires. 

  • If an item is discounted too aggressively, it may sell out too quickly, leading to unnecessary margin loss.
  • If an item is discounted too conservatively, it might still go unsold and be discarded.

Algorithms continuously learn from sales patterns to find the optimal balance. Over time, with data from thousands of stores, the system fine-tunes the best discount strategy based on: 

  • Product category, such as fresh meals versus vegetables versus fish
  • Day of the week and time of day
  • Seasonality trends

Why Did Larger Chains Like Jumbo or Plus Not Implement This First?

Hos found it surprising that a smaller player like Boon was the second to implement a dynamic discounting solution, ahead of larger retailers like Jumbo or Plus, or even Aldi or Lidl, given their international reach.

However, he hinted that another supermarket chain is currently testing out Markdown Optimization in the Netherlands. While he could not disclose the name due to confidentiality, he emphasized that regional supermarket chains and Superunie members are also embracing the technology.

The Financial and Environmental Impact

Retailers who have not adopted an optimized markdown approach yet are leaving money on the table. The system can reduce shrinkage costs by 20 to 45 percent, making food waste both financially and environmentally unsustainable.