Industry-retail symbiosis: What we should know to reduce perishable processed food disposal for a wider circular economy

Abstract

This exploratory paper investigates how to reduce 25% of the potential perishable processed food disposal (PPFD) in the industrial-retail sector in a specific emerging economy The data were collected through 28 semi-structured interviews with suppliers and supermarket managers in an emerging economy. The findings contribute by revealing a paradox and a symbiosis that can advance the circular economy (CE). This paradox begins when suppliers reduce their own food disposal by offering benefits to supermarkets, which helps to sell items close to their expiration date. However, these benefits may induce supermarkets to place orders that exceed their sales capacity. When supermarkets do not sell these items before their expiration date, the products tend to be returned to the supplier, thus reducing the supermarket's waste but increasing the supplier's waste. These actions reveal a paradox: reducing PPFD in one link of the supply chain may exacerbate it in another. “Industry-Retail symbiosis” can improve the CE. Such symbiosis emerges when suppliers reduce their margins to offer additional benefits to supermarkets. These additional benefits improve supermarkets' sales to consumers with lower purchasing power or to smaller retailers that may use the items immediately, thus avoiding the return of items which are still suitable for human consumption and thereby improving the CE. Future studies could investigate: how to enhance Industry-Retail Symbiosis; what managerial information is required to use technologies to align products, stocks, prices, and stores; how suppliers can best manage the benefits offered to retailers or their partnerships with other suppliers (e.g., a shared sales center to improve symbiosis with retailers); and how retailers can best manage alternative sales channels and store managers' autonomy.