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AI system that cuts prices as products reach sell-by date trialled in UK as stores consider electronic labels

YELLOW stickers could soon be a thing of the past as supermarkets edge closer to using automated pricing on fresh produce, meat and even bread.

An artificial intelligence system (AI) that automatically reduces prices in the run-up to a product’s sell-by date has been rolled out across Europe with UK supermarkets also trialling electronic labelling on shelves.

The model could cut prices, particularly on meat and fresh produce, according to retail experts, while boosting supermarket profits by as much as 30 per cent by curbing waste.

Morrisons said that electronic shelf labels (ESLs), the first step towards dynamic pricing, had been introduced in a small number of existing shops, and in two of the shops it opened this year in Chelmsford and Newcastle.

Asda, which completed a trial on 25,000 products this year, has rolled out an ESL trial on packaged and unpackaged fruit and vegetables in its Middleton branch.

Sainsbury’s and Tesco have also tested ESLs in the past, and Waitrose is said to be considering trialling the labelling. Lidl, Aldi and M&S already have them in selected stores.

Retail expert Clare Bailey said the move to digital labelling is the first step towards a “dynamic pricing model” in supermarkets as they look to reduce labour and production costs and waste.

Ms Bailey added: “It is something that they [retailers] should be looking to do much sooner rather than later, because the technology has been proven.”

The Retail Champion founder said the technology could be a boon to consumers, as it could be used to pass on price decreases more quickly.

“I think as long as it is used for the benefit of the customer, or where a genuine price increase has to be made, then that’s pretty good use for the technology,” she said.

David Kat, of food waste firm Wasteless, which uses an AI model to reduce food waste by reducing prices in line with customer demand, said the introduction of ESLs was key to scaling up automated pricing on shop floors.

UK retailers are responsible for approximately 300,000 tonnes of food waste every year, according to a House of Lords report. The World WildlifeFund reported in 2021 that up to 40 per cent of food produced is never eaten.

Mr Kat said: “If a retailer had ESLs, they would be able to display price updates multiple times during the day. If they don’t have ESLs, they will have to stick labels manually. You only want to do that once a day or once every two days.”

Asda concluded a trial of the ESLs at its Stevenage store. The shelf labels were also tested to see if they helped workers responsible for collecting items for online orders become faster and more efficient.

A spokesman said: “This trial allows customers to see real-time price differences in packaged and unpackaged versions of the same product.”

Waitrose said that while it has no concrete plans for active trials of ESLs, they are something it is interested in testing.