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Food Waste caused by Excess Inventory at Retail Stores in Japan

In recent years, the sustainability of the global environment has become an attractive issue. The world is exposed to climate change, and there is an urgent need to protect the environment and secure natural resources for the future. Environmental protection and the securing of natural resources require efforts from various stakeholders. This study focuses on food waste in the retailing industry. While many developing countries are having difficulties to secure food, a large amount of food is disposed mainly in developed countries. Food waste produces greenhouse gases and has a negative impact on the environments. A significant amount of food is wasted in the retailing industry, which is mainly due to their excessive stocking. Such excessive stocking is to avoid losing customers because of going out of stock. Although this behaviour is optimal for retailers’ business strategy, it is not preferable from the perspective of preserving the global environment. We theoretically demonstrate humans’ behavioural choice in relation to the use of natural resources and a mechanism of retailers’ overstocking behaviour using economic models. Moreover, we also examine the current state of food disposal and food recycling in Japan. Although, awareness of reducing food disposal is increasing, and various efforts such as food recycling are being carried out in Japan, sufficient reduction of food disposal is hardly be achieved. We argue that in addition to food recycling, measures to discourage retailers from overstocking food products (e.g., tax imposition) are necessary for the sufficient reduction of food waste and the sustainability of the global environment.