The Hidden Costs of Bulk Deals and Phantom Demand

Circular Economy Food

Bulk and pallet deals, volume discounts, and “buy one, get one free” promotions. Companies are increasingly using special offers and pricing strategies to attract customers, partly due to inflation. In July 2026, inflation in the Netherlands stood at 3.2 percent, up from 2.9 percent in June, and in Belgium, the European harmonized inflation rate rose to 3.6 percent in July 2026. It makes sense that we take advantage of these kinds of offers, but from the perspective of sustainability and waste, this raises another issue.

What is phantom demand, and why does a pallet deal cost you more than you think?

It’s a tempting scenario for any buyer: a supplier offering competitive pallet deals and volume discounts due to persistent inflation. While this may seem like a smart cost-saving measure on paper, this purchasing strategy has an invisible impact on the environment and your wallet. Bulk offers create “phantom demand”: an apparent demand for products that is, in reality, greater than what consumers or end users actually need.

Due to a sudden product update or a shift in customer demand, this excess inventory eventually turns into unusable “dead stock.” The financial impact of this begins immediately after the purchase. The money tied up in pallets sitting in the warehouse for six months (capital tied up) cannot be invested in other business processes. Add to that the cost per square meter of warehouse space, plus the additional costs of moving and managing inventory, and energy costs such as cooling or climate control. Before long, those operational costs outweigh the initial purchase discount. If the inventory ultimately has to be discarded, you’ll also have to pay the costs of waste disposal.

Whether the unused pallets end up in the warehouse or as waste, raw materials have been used in their production. On top of that , phantom demand also appears to create greater demand for pallets: more trees are being cut down, and more wood is being processed and transported. When trees are cut down, not only does the absorption of greenhouse gases stop, but all the stored CO2 is released back into the atmosphere all at once. Trucks are driving around to transport products that aren’t actually needed at all. This results in an unnecessarily high carbon footprint. Thus, a competitive offer often costs more in the long run than it yields upfront, both financially and in terms of sustainability.

What Retail Teaches Us About Business Waste

A heavily discounted pallet deal works essentially the same way as a consumer promotion at Uitgelichte afbeelding (88) supermarket. Take the well-known “buy one, get one free” promotion on blueberries. This is a classic example of a promotion that directly shifts the risk of waste: from the store shelf to the end user’s trash can.

Blueberries are soft fruit. As soon as one berry in the container starts to mold or becomes bruised
, it will affect the rest of the package within 24 to 48 hours. So just one rotten berry is enough to make an entire container go moldy. Research also shows that the less money we perceive ourselves to be paying for a specific product, the easier—and with less guilt—we throw away the leftovers.

Globally, food waste accounts for as much as 8 to 10 percent of total greenhouse gas emissions. Moreover, a large part of the environmental impact of food in the supply chain occurs before it even reaches the store—during cultivation, processing, transportation, and packaging. When food is unnecessarily thrown away, it results in unnecessary CO2 emissions during production, unnecessary water use for agriculture, and unnecessary energy consumption, unnecessary transportation, and the associated costs.

Although this is an example related to consumers, the parallels for buyers may be closer than you might initially think. The mechanism behind a surplus of fruit is identical to over-purchasing chemical raw materials with strict expiration dates, semi-finished products that are sensitive to temperature fluctuations, or packaging materials that become unusable due to rapid rebranding.

Why doesn’t Too Good To Go have a downside?

Not every discount backfires. Too Good To Go shows that there’s another way. Supermarkets, bakeries, and restaurants are increasingly responding to this by offering products—which would otherwise end up in the trash at the end of the day—at a discount. The point of these offers isn’t to create extra demand, but to clear out existing, excess inventory. Globally, Too Good To Go saved 157 million meals from waste in 2025, bringing the total to more than 600 million meals saved since its founding in 2016. The difference from the earlier examples, therefore, lies not in the discount itself, but in the goal behind it: is the offer intended to sell more than is needed, or to save what’s already there?

How can you prevent waste by purchasing more intelligently?

Ultimately, it all comes down to procurement—not only to prevent waste, but more broadly to reduce environmental impact. Whereas the lowest price used to be the deciding factor, organizations are now increasingly factoring environmental impact into their procurement processes and tenders. Sustainable purchasing to prevent waste requires smart planning, the right quantities, and an eye for the shelf life or lifespan of products.

An important tip that helps with this is to carefully align historical consumption data with purchase quantities, shelf life, and interim risks. In addition, make the carbon footprint of transportation and storage a standard part of the procurement assessment. By measuring carefully in advance and factoring in sustainability, you can prevent waste. Finally, it’s important for procurement professionals to be involved in circular product design from the very beginning . Ensure that procurement and suppliers are involved from day one. By influencing the choice of materials, procurement can prevent designs that rely on raw materials that will be unaffordable or simply unavailable a year from now.

Want to know how to put this into practice within your organisation?

Learn how sustainable procurement helps you balance cost, environmental impact and social factors in waste management.

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