Food Donations, Retail Operations, and Retail Pricing

• 成果类型: Article
• 署名作者: Lowrey, John D.; Richards, Timothy J.; Hamilton, Stephen F.
• 署名单位: Northeastern University; Arizona State University; Arizona State University-Downtown Phoenix; California State University System; California Polytechnic State University San Luis Obispo
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.2022.1185
• 发表日期: 2023
• 页码: 792-810
• 关键词: food donations; secondary market; competitive retailers; food waste

摘要

Problem definition: For grocery retailers, managing perishable food that is nearing expiry is a major challenge. Donating food to food banks is socially responsible, as it improves local communities and reduces waste generation. It also diverts food to a secondary, quality-differentiated market. Academic/practical relevance: In this paper, we quantify the economic impacts of this secondary market for food by examining donation and pricing behaviors for competing retailers. Methodology: We use a structural model of price discriminating oligopoly retailers to study the effect of food donations on store and category-level demand and equilibrium prices. Empirically, we estimate the food donation effect using a unique data set of food donations and sales for several categories of perishable foods across two major retail chains that compete in the same market. Results: The competitive effects of food donations follow from the price-discrimination logic. First, food donations create a direct demand effect. Donations raise the average quality of products on display, shifting demand curves inward and rotating them clockwise (e.g., more inelastic). Second, food donations create a market enhancement effect, softening price competition and raising equilibrium prices among competing retailers. Managerial implications: Food donations increase food prices and store profits, tying the socially responsible option to an economic benefit. This study contributes a new type of reuse operation to the literature on closed-loop supply chains.