Whole Foods Market, Inc. (NASDAQ:WFM) CEOs admitted they “made some mistakes” after it was discovered the company overcharged customers for pre-packaged foods in New York City stores. The co-CEOs issued an apology to customers in a blog post and a video.
Whole Foods Investigation
These findings were part of an investigation conducted by the New York City Department of Consumer Affairs (DCA). The results were released on Jun. 24 and it was alleged the company’s eight New York City stores had regularly listed improper weights on numerous pre-packaged foods across 80 product categories dating back to 2010. This mis-weighing led to overcharges from $0.80 to $15 per item.
Julie Menin, DCA commissioners, said her inspectors called the situation as “the worst case of mislabeling they have seen in their careers.” Menin added that they discovered only a few situations where customers were undercharged for food.
In one instance, a $20 vegetable platter was overcharged by an average of $2.50. In another example, eight packages of chicken tenders priced at $9.99 per pound were overcharged an average of $4.13.
Menin noted last week that Whole Foods had thousands of violations of mislabelling packaged goods, and these actions could lead to fines. According to the DCA, the first violation comes with a fine of up to $950, and an additional maximum of $1,700 for any violations thereafter. The fines are generated based on the food category.
Free Food for Customers if it Happens Again
Standing in front of a sliced fruit section in one of their grocery stores and dressed casually, John Mackey and Walter Robb, co-CEOs of Whole Foods, apologized for the fact that many customers were overcharged for meat, sliced fruit, fresh squeezed juices and sandwiches by employees.
“Straight up, we made some mistakes. We want to own that and tell you what we’re doing about it,” said Robb.
Mackey noted there were mis-weighing errors during the prepping and pricing of the food.
“We know they’re unintentional because the mistakes are both in the customers’ favor, and sometimes not in the customers’ favor,” added Robb.
Moving forward, Whole Foods, which is a popular venue for younger consumers, will enhance its training at stores across the United States. Moreover, if customers find out they were overcharged for the items they will be given away for free.
“We apologize to our customers for any discrepancies that may have occurred,” the company wrote in a blog post.
Following the announcement, Menin said in a statement her department is “gratified” by its admission.
“We are gratified that, as a result of our investigation, Whole Foods is admitting the deficiencies in how they label their pre-packaged foods and taking steps to ensure that no New Yorker is overcharged,” said Menin.
Despite the apology, Menin says she will keep a close eye on both Whole Foods and other grocery chains.
Whole Foods shares were trading in negative territory Thursday at $39.15.