NEW YORK (TheStreet) -- Whole Foods Market (WFM) shares are down 0.35% to $40.94 in early market trading on Wednesday after investigators in New York City launched a probe of the organic foods grocer to determine whether it has been routinely overcharging customers.
The investigation dates back to at least 2010, according to the New York Daily News.
The city's Department of Consumer Affairs conducted a sting operation in the fall to check the accuracy of the weight labeled on pre-packaged foods.
Investors accumulated a sample of 80 different types of items at eight different Whole Foods locations around the city and found that the weight on every label was inaccurate.
Whole Foods has denied the allegations with a spokesman saying that the grocer is "vigorously defending itself" and that the company "never intentionally used deceptive practices to incorrectly charge customers," according to the Daily News.
New York City's investigation comes in the wake of the company agreeing to pay $800,000 to settle similar allegations in California last summer.
TheStreet Ratings team rates WHOLE FOODS MARKET INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WHOLE FOODS MARKET INC (WFM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."