EXPRESS: Do You Lose When You Sell Loose? Impact of Unpackaged Sales on Profit and Waste

Abstract

Industry experts frequently mention that package size adjustments are necessary to curb food waste and in particular, loose sales, i.e., the sale of unpackaged products by the unit or by weight, are often promoted as a greener alternative to packaged sales. Given the recent trend towards more in-store prepared foods, retailers increasingly find themselves having to decide how to sell the products they prepare on-site. In this study, we consider a retailer selling a perishable product under two possible formats: in packages of a fixed size or in loose format, which allows consumers to buy the exact quantity they wish. The retailer sets prices and package size to maximize profit while consumers maximize their expected utility. We solve for the optimal prices and package size. We find that it is not always optimal for the retailer to introduce a loose sale option because, in some instances, more profit can be earned by selling only packages, forcing consumers to buy more than their ideal quantity, leading to excessive waste at the consumer level. When loose is introduced optimally, it is purchased by low-consumption-needs consumers, leaving the packages for high-consumption-needs consumers. We demonstrate the robustness of our results by considering different levels and types of consumer heterogeneity. Our results indicate that adding loose always increases absolute waste, which may question the general notion that loose sales are always environmentally-friendly. However, we find that in many cases, adding loose yields a win-win situation higher profits for the retailer and lower relative waste at the consumer level. Further, adding a loose sale option often lowers the package price without affecting the package size, hereby benefiting the high-consumption-needs consumers. Our results suggest that policymakers should consider legislation promoting the sale of high-demand perishable items in loose format.

The authors' abstract, as published at the source. Production and Operations Management, 2026 · DOI ↗