Share
Home Sustainability GCC’s $7 billion food waste crisis: How retailers can lead the change

GCC’s $7 billion food waste crisis: How retailers can lead the change

The region's retail sector wasted around 1.3 million tons of food in 2022
GCC’s $7 billion food waste crisis: How retailers can lead the change
The GCC's grocery and retail markets are growing rapidly, with the UAE's food retail market valued at $40 billion

Food waste remains a pressing challenge in the Gulf Cooperation Council (GCC) countries, where it averages 150 kg per capita each year — approximately 14 percent higher than the global average of 132 kg. While this figure is lower than in countries like the U.S., it surpasses the levels seen in many other developed economies, according to the report ‘Tackling Food Waste in the GCC Grocery Market’ by Oliver Wyman.

Retail food waste, although accounting for a smaller share (5-15 percent) of total food waste, is 38 percent higher than the global average in the region, presenting a significant opportunity for improvement. In 2022, the GCC retail sector wasted around 1.3 million tons of food, leading to an annual loss of $4-7 billion — enough to provide iftar meals for 70 percent of Muslims worldwide during Ramadan.

Beyond financial costs, food waste carries substantial environmental implications, contributing to greenhouse gas emissions and depleting critical resources such as water, energy, and labor, all of which could be redirected toward sustainability efforts in the region.

Read: UAE Food Bank diverts 5,466 tons of food from landfill, reducing environmental impact boosting sustainability goals

The GCC’s grocery and retail markets are growing rapidly, with the UAE’s food retail market valued at $40 billion and Saudi Arabia reaching $62 billion in 2023. However, large hypermarkets and grocery chains face challenges due to low margins, high sales volumes, and rising competition.

Promotions like “buy three, pay for two” often lead to the purchase of perishable goods that go to waste, while complex inventory systems and inconsistent stock management contribute to unnecessary waste.

Investing in infrastructure that promotes waste reduction can create a substantial impact

Four key factors contribute to food waste in the GCC

  • Fragmented supply chain dynamics

Unlike many Western countries, the GCC supply chain relies on direct deliveries from suppliers to stores, which increases safety stock and leads to excess inventory, according to the report.

  • The impact of abundant supermarket displays

GCC supermarkets are typically stocked fuller than those in Western nations, as half-empty shelves are perceived as unappealing. Conservative expiry date regulations, such as those in Saudi Arabia, also shorten the time products are available on shelves.

  • Limited ownership and supplier contracts

Supplier agreements often require unsold products to be returned, leaving retailers with surplus stock they can’t use. This dynamic shifts the focus toward maximizing sales, which drives up costs passed onto consumers.

  • Manual forecasting in waste generation

Inventory forecasting is often done manually, with limited technological support, leading to stock mismanagement based on presentation rather than actual demand.

To reduce food waste, GCC retailers must adopt new approaches. Governments play a crucial role by creating frameworks that support sustainable practices, as exemplified by the region’s commitment to the Sustainable Development Goals (SDGs) to halve global food loss and waste by 2030.

food 2
Food waste carries substantial environmental implications, contributing to greenhouse gas emissions and depleting critical resources such as water, energy, and labor

Retailers should focus on improving forecasting and replenishment systems to align stocking and presentation with peak demand, collaborate with suppliers to reduce safety stock, and explore more centralized and efficient supply chains for fresh products.

Additionally, training the workforce to handle perishable items effectively, identify good quality products, and place accurate orders will be essential in curbing waste.

With regulatory support, public awareness campaigns, and strategic partnerships, GCC governments can foster an environment that encourages retailers to embrace sustainability and reduce food waste across the region.

The stories on our website are intended for informational purposes only. Those with finance, investment, tax or legal content are not to be taken as financial advice or recommendation. Refer to our full disclaimer policy here.