"Is 'Selling in Order of Oldest First' Counterproductive? The 'LIFO Strategy' That Flips the Conventional Wisdom of Deli Counters"

The Reason for the Reversal Phenomenon in Deli Sections Where "Sell in Order of Oldest First" Was Common Sense

Supermarket delis, rotisserie chickens, sushi, salads, and other so-called "premade foods" are allies for busy households and also serve as crowd-pullers in stores. Some stores place ready-to-eat sections near the entrance, while others strategically place featured items (such as rotisserie chicken) at the back to encourage additional purchases.

However, managing premade foods is challenging. The quality declines over time, and unsold items are prone to being discarded. A major retailer reportedly discarded 9% of its prepared foods.

To address this issue, a research team from Stanford University (including Dan Iancu and Erica Plambeck) developed a model that considers the "order of shelf placement," "shelf time (effective shelf life)," and "whether to display the time of preparation (timestamp)" together, arriving at a counterintuitive conclusion.

Here's the conclusion upfront.

• Selling in "newest first (LIFO)" order, rather than "oldest first (FIFO)," can increase sales and reduce waste.

• Timestamps (displaying preparation time) are not necessarily beneficial for the store or society (in some conditions, "not displaying" may be better).

• Moreover, LIFO is effective when combined with "longer shelf time" as a set (it's less effective when only one is applied).

Why does such a reversal occur?

Why does LIFO (selling newer items first) reduce waste?

Many stores operate on the principle of "older items to the front" = FIFO (First In, First Out). Conventionally, selling older items first should reduce expiration and waste. In fact, if the shelf life (how many hours before removal) is fixed, FIFO is considered easier to manage in terms of reducing waste and opportunity loss.

However, premade foods not only "decline in quality over time" but also become "less desirable to buy" as quality drops. The key insight from the research is here.
LIFO raises the average "purchasable quality". This increases consumer satisfaction and the expectation of buying again, leading to increased demand and reduced leftovers—thus reducing waste, establishing a "paradox."

In a Phys.org article, Professor Plambeck explains that "while some items at the back of the shelf might expire, LIFO raises the average quality, which increases demand and ultimately reduces waste."

In other words, premade foods cannot be discussed solely in terms of "inventory turnover optimization."The "quality of experience (hit or miss)" reflects on demand.

Timestamps are "kind" but shorten shelf life

Consumers generally prefer newer items. Therefore, displaying "when it was made" provides reassurance. However, there are situations where this backfires.

The article explains with an example: "If there is chicken that came out an hour ago, customers may turn their noses up at chicken from two hours ago (even if they are almost equivalent)." With timestamps, customers tend to focus on the "latest batch." This leaves slightly older products unsold,effectively shortening shelf life. Shorter shelf life tends to increase waste.

The research paper also concludes that timestamps (even with strategies like changing prices over time) "work in the direction of shortening shelf life, potentially leading to increased waste and reduced sales."

On the other hand, if timestamps are not displayed, customers cannot distinguish the freshness of individual products, so purchasing decisions are more likely based on "average satisfaction from past purchases."

Combining this with LIFO (an arrangement where newer items are more likely to sell) creates a cycle of "increasing average hits" → "buying again" → "reducing leftovers."

Of course, stores need to keep track of time for safety management. The article also introduces the idea of managing with codes readable only by employees, similar to color tabs on bread bags.

The Design Philosophy of Shelf Life Symbolized by "Rotisserie Chicken"

The research paper uses rotisserie chicken as an example and cites real store operations.

• A "multinational retailer famous for operational efficiency (anonymized)"did not display timestamps for customers, used labels only employees could understand to determine age, anddiscarded items after four hours on the shelf.

• Costco is highlighted for using its flagship **$4.99 rotisserie chicken** to attract customers, placing it at the back of the store to encourage "additional purchases."

• The paper further mentions that Costcostarted adding timestamps to chicken in 2024 (contrary to previous practices), and that Sprouts Farmers Market also uses timestamps.

Here's the interesting point. In the practical world, there is a strong demand for "displaying freshness information," while the model suggests that "not displaying" might work better in some cases. This means that the field is still in a trial-and-error phase, andthe correct answer is not "uniform across all stores," but determined in conjunction with customer demographics, product characteristics, shelf life, and pricing strategy.

Mandatory Donations, Though Well-Intentioned, Can Push Waste "Downstream"

As a policy to reduce food loss, there is a movement to mandate the donation of unsold items. The Phys.org article mentions that California has started requiring donations of "edible unsold goods," while in France (with a similar law in 2016), audits reported "a decline in donation quality and a decrease in donation volume per store."

The research team explains that "reverse incentives" can arise here as well. Since the logistics and sorting of donations incur costs, if stores lean towards "donating rather than selling out,"there is a temptation to extend the shelf life (selling time), resulting in quality deterioration by the time it reaches food banks, ultimately leading to disposal—meaning the loss shifts downstream.

"Wanting to do good" alone does not make the system work. Here too, "operational design on the ground" determines the success or failure of the policy.

What Happens When Applied to Japanese Deli Sections?

Japanese supermarket and convenience store delis have very detailed product variety and turnover. When applying the insights from this study, the discussion can be narrowed down to three points.

1. How much "visible freshness" to display
   The more "manufacturing time" is shown, the more customers focus on the latest items. This, as a flip side of reassurance, makes it challenging to sell older stock.

2. "First In, First Out" is not the only righteous way to arrange
   Premade foods benefit from "raising the average experience." By intentionally creating time slots where newer items are at the front, the idea emerges to increase hit experiences and capture repeat purchases.

3. The design of shelf life (how many hours before removal) is the strategy itself
   There is a point that LIFO is effective when combined with longer shelf life.
   In other words, including "when to remove," "timing of discounts," and "refill waves," deli sections become "operations as marketing."
   
   
   

SNS Reactions: The Discussion Shifts from "Fairness" to "Average Experience"

The Phys.org article itself is newly published, and the comment section on the article page is not active.

However, related research has been a topic of discussion for some time, with comments on Substack newsletters suggesting that "LIFO for premade foods improves the average experience compared to FIFO," and there are voices noting similar strategies in other shelves like milk displays.

Another comment questions whether the probability of receiving a fresh sample decreases as the queue lengthens, raising the point of how LIFO designs "everyone's experience."

What becomes apparent is that SNS interest leans more towards

• the perception of hit or miss (whether "today was a hit" increases)

• controlling the sense of unfairness (whether people feel they "always get stuck with the old ones")

• the dilemma of information disclosure (the trade-off between reassurance and loss reduction).
  
  
  
  

Conclusion: "Selling Newer Items First" Was a "Psychology × Operation" Approach to Reducing Loss

Premade foods are not just inventory but a "food experience." Therefore, optimizing the way they are sold needs to be designed not only in terms of waste rates but also including customer expectations (whether they will buy again).

Revisiting LIFO, optimizing shelf life, and handling timestamps—these three points "together" are the key to influencing both sales and food loss.