All rubbish from the Co-operative's food shops is to be diverted from landfill to be recycled or turned into energy, the group has announced.
The scheme, which has already been introduced at half the Co-operative's food stores, will be rolled out across its 2,800 shops by the summer in order to stop 34,000 tonnes of waste from going into the ground.
The initiative will see waste food and flowers sent for a process known as anaerobic digestion which creates gas for energy and fertiliser.
Food waste makes up almost two thirds of the rubbish produced by the Co-operative food stores.
Customer and general waste will go to a facility which shreds and dehydrates solid waste to produce fuel, while items such as empty milk bottles, tins, cans, office paper and till receipts will be sent for recycling.
Cardboard and polythene will continued to be baled and sent for recycling, the Co-operative said.
As well as cutting down on waste going into landfill, the scheme will end more than 225,000 skip collections from stores each year and halve the cost of managing food waste, the group said.
It will also cut down on road miles as waste will be sorted at stores, collected by the Co-operative's own delivery lorries and taken to distribution depots where it will be dealt with by waste management company Biffa.
David Roberts, director of trading property at the Co-operative Food said: "As a community-based retailer with an ethical approach to business we have a social responsibility to reduce waste that goes to landfill, and we have pledged in our ethical plan to divert all our food store waste from landfill by the end of 2013, which we will achieve by the end of July, five months ahead of schedule."
He said the scheme was a "win-win solution". "It will not only divert all our food store waste away from landfill, but will also convert it into a valuable resource, which we believe sets new standards in waste management."