Whole Foods is Under Scrutiny Yet Again
This month reports surfaced claiming that there is an actual reason Whole Foods prices are so high: the retailer was mislabeling products and over charging. After an investigation by the New York City Department of Consumer Affairs, it found that customers were in fact overcharged by as much as $6.
“Inspectors weighed 80 different types of items at Whole Foods’ eight locations in the city that were open at the time. They found every label was inaccurate, with many overcharging consumers, agency spokeswoman Abby Lootens told The News.”
One inspector even said “it’s the worst case of mislabeling they have seen in their careers.” To make matters worse, this isn’t the first time Whole Foods has been in trouble for labeling errors. The company was charged an $800,000 fine for overcharging customers in California.
At first the company denied the claims, but after outrage from customers, the co-CEO’s released this video. In it they apologized for the mistake saying, “These things happen”, but they are taking responsibility and if a product is found to be miss-labeled and overcharged, the customer would get the item for free. While it is good the company is taking responsibility, the problem should have never happened in the first place. The company is often under scrutiny for its high prices and its shares have “fallen nearly 6%, and are treading near 52-week lows, down from 40% from the stock’s all-time high in 2013.” (Motley Food)
Competition for the company is at an all-time high with more grocery retailers adding organic sections with lower prices. Even Walmart has added an organic section, and is opening new stores every week. This week it was announced that Trader Joe’s will open a new store in trendy Williamsburg, just three blocks from where a new Whole Foods will be opened. The company has seemed to keep a cool head about all of this. Its answer to the competition was to announce that they are planning to open a new concept aimed towards millennials called 365. Thus far many millennials seem unsure of the new plans.