Whole Foods slapped for pricing violations

High-end grocery chain settles claims of pricing violations. Will customers forgive?

Published: July 05, 2014 03:00 PM

If Whole Foods wasn’t expensive enough, now comes word that luxe supermarket operator, with 380 stores across the country, has been overcharging customers in California. In late June, the City Attorneys of Los Angeles, Santa Monica, and San Diego reached an $800,000 settlement with Whole Foods Markets after a year-long probe by state and county weights and measures inspectors, who uncovered widespread pricing violations, specifically:

  • Failure to deduct the “tare” weight of containers when ringing up charges for self-serve foods at the salad bar and hot bar.
  • Giving less weight than the amount stated on the label, for packaged items sold by the pound.
  • Selling items such as kebabs and other prepared deli foods by the piece, instead of by the pound as required by law.

Under the settlement terms, Whole Foods will appoint two state coordinators to oversee pricing accuracy at stores throughout California; designate an employee at every store who will be responsible for the accuracy of all prices; and conduct random audits at each store four times a year to assure that all prices are accurate and that proper weight is being deducted for all containers. There are 74 Whole Foods stores in California; 10 are in Los Angeles.

Read our Supermarket buying guide as well as another special report on Best & worst supermarkets. 

Beacon of integrity

Whole Foods has long ranked among the better chains in Consumer Reports Ratings of the nation’s largest supermarkets (the Buying Guide is free; Ratings are accessible to subscribers), based on reader surveys. However, for all the lofty praise it earns for top-notch perishables (meat and produce) and sparkling clean stores, readers have dinged Whole Foods’ prices: it ranks as one of the most expensive of all 55 supermarkets in our latest survey. The chain's derisive nickname is "whole paycheck."

Whole Foods fans, obviously, don’t mind paying for quality. But how badly has the misstep damaged the relationship between Whole Foods, a retailer that positions itself as a beacon of integrity, and its loyal customer base? After all, the grocer isn’t your typical supermarket. Whole Foods has taken the ethical high ground when it comes to selling products. For example, they emphasize sustainable seafood, preach animal welfare practices, promote organics, and won’t offer products with artificial colors, preservatives, and sweeteners. They also support the labeling of products that contain GMOs.

In fact, the company is a self-described mission-driven organization that aims to set the standard of excellence for retailers–and claims these high standards permeate all aspects of its business.

Some benefited from errors

After the bad news broke, Whole Foods showed contrition, but also tried to deflect some of the heat, saying California regulators have also fined other retailers for similar “unintentional inaccuracies.” Executives also said that some shoppers benefited from weighting errors in their favor.

“While close to 99 percent of the millions of transactions we processed during the evaluation period were found to be accurate, we are constantly committed to getting as close to 100-percent accuracy as possible,” the company said in open letter to consumers on its website. "We are not alone in major cases of this type."

“But we know we’re not other retailers–we’re Whole Foods Market, and we take pride in setting higher standards for quality and customer satisfaction that have helped push the entire grocery industry to do better. And that’s our promise to you – to do better.”

—Tod Marks




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