REVEALED: The €90 billion hidden cost of managing unsold and surplus food

New research for ECR Retail Loss finds the extra cost of managing unsold and surplus food amounts to 1.8% of sales - enough to wipe out profits.

Our new report reveals that the ‘hidden costs’ to retailers associated with managing unsold and surplus food amounts to €90bn a year. If retailers could simply halve these costs buried inside their P&L’s, most could grow their profits by more than 20%*.

Exploring the True Cost of Unsold Food in Retail, led by Professor Lisa Jack and her team at the University of Portsmouth, finds that the additional costs of dealing with unsold food - such as staff time, markdowns, redistribution and disposal - can be as much as 1.8% of sales revenue.

Separate analysis by ECR Retail Loss estimates the global fresh produce market at more than €5 trillion+ pa**. Suggesting the total global hidden costs of managing surplus and unsold food are €90bn+ every year.

For many retailers this extra 1.8% of hidden costs could be the difference between profit and loss - where profits can sometimes be 1-2%.

“Retailers often assume they’ve already accounted for waste, but our model shows many are missing critical hidden costs,” says Professor Jack. “Most only track the obvious, like markdowns or checking expiry dates, but the real picture includes staff time, costs of exit schemes, theft and unrecorded losses. The true costs are higher than many retailers assume.”

Shining a light on the hidden costs of food waste

The data, based on detailed case studies with four UK and EU retailers, was used to create an interactive model. The model uses European figures, but the principles apply globally.

Retailers who would like access to the model should contact ECR Retail Loss directly.

The study modelled:

• Exit routes for unsold food including markdowns, staff shops, donations, animal feed, and incineration
• Cost breakdowns for 1,000 SKUs, incorporating staff time, consumables, transport and fees
• Multiple retail scenarios – from best-case to worst-case 
• The model showed that while most supermarkets successfully sell more than 97% of their food inventory, it’s the complex and costly processes behind the final 3% that are often overlooked.

Retailers face a tough balancing act to minimise waste while maintaining on-shelf availability.

The report calls for a shift in mindset - to treat food waste as a core financial challenge rather than a sustainability issue alone.

By integrating loss prevention strategies with supply chain and pricing decisions, supermarkets can reduce waste without sacrificing profitability.

“Even with redistribution schemes in place, handling unsold food takes time, money and management focus,” explains Professor Jack. “And ironically, doing the right thing like donating to charity or recycling for animal feed sometimes carries more cost than landfill.”

The report warns that siloed reporting, poor data integration, and incentives not to record losses all mask the real cost of food waste. It also raises concerns about the risks of greenwashing, with major variations in how food waste is defined and reported across the industry.

A new mindset: food waste as a margin risk

Professor Jack calls for a shift from seeing food waste as purely a sustainability issue, to treating it as a core financial risk. The report sets out practical ways for retailers to act:

• Cross-functional collaboration: breaking down silos between CSR, finance, buying, and store ops
• Smarter markdowns: using AI-driven pricing to minimise waste and protect margin
• Improved tracking systems: to reduce unexplained losses and ensure tax compliance
• Clearer performance indicators: aligning waste KPIs with profit goals

John Fonteijn, Chair of ECR Retail Loss, said: “Retailers need to understand that food waste is not just an ethical or environmental issue - it’s a significant financial drain.

“Supermarkets all around the world need to pay much more attention to the quantifiable extra costs associated with managing food waste effectively.

“This report provides the tools to measure the impact and make better decisions that benefit both business and sustainability.”

Download the full report

You can read or download the full report from here: Exploring the True Cost of Unsold Food in Retail.

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*The 20% growth is based on typical UK operating profits of 3%.
Half of 1.8% is 0.9%
0.9% as a proportion of 3% is 30%. We use 20% to be prudent

**The €5 trillion estimate for the global fresh produce market is based on publicly available data from the Food and Agriculture Organization of the United Nations (FAO), Our World in Data, and the World Bank, applying established economic models used by the USDA and FAO to estimate farm-to-retail value across the global food system.

• FAO estimates the gross value of global agricultural production at farm-gate level to be more than USD 4.0 trillion in 2023 (FAO Highlights; Our World in Data).
• Using the USDA’s “food dollar” model, which estimates that farm-gate production typically accounts for 20% of total consumer food spend, this implies a global food retail value of approximately USD 20 trillion.
• Fresh produce (fruits, vegetables, fresh meat, dairy, fish) consistently represents around 30–35% of total food retail spend in major markets, which equates to a fresh produce market size of USD 6–7 trillion globally.
• Applying a July 2025 average exchange rate of $1: €0.855 (Exchange-Rates.org), this corresponds to €5.1–€6.0 trillion in current terms.

This model draws from:

• FAO/UN and World Bank macroeconomic analysis of food system structure and market value (World Bank),
• Agricultural output data from FAOSTAT and Our World in Data, and
• Established farm-to-retail mark-up ratios applied globally by USDA and FAO economists.

Commercial estimates from market analysts offer more conservative, but complementary, figures:

• Zion Market Research estimated the global fresh food market at USD 3.1 trillion in 2023, equivalent to approximately €2.65 trillion.
  – Source: Zion Market Research
• Towards FnB, a specialist F&B market research firm, estimated the global fresh produce market at USD 3.5 trillion in 2024 (approx. €3.0 trillion).
  – Source: Towards FnB

While commercial estimates may apply stricter category definitions or exclude informal/wholesale markets, the €5 trillion figure reflects a comprehensive, system-wide valuation based on globally accepted agricultural economic models.