Updated: 11:45 a.m., June 27, 2015
NEW YORK (MainStreet) — Now that Whole Foods (WFM) has been accused of overcharging in New York City stores, one question remains: can you trust the company enough to keep shopping there? And how big will the fines be for its alleged pervasive pattern of misweighing packaged items - and frequently charging consumers for much more than they actually got?
"It's outrageous, it's like the deli guy with his thumb on the scale," said a spokesman for New York watchdog group Menu Police who insisted on anonymity. Whether these negative accusations will color public opinion and affect customer shopping patterns remains to be seen, but consumer advocacy groups have been pushing a full court press against the grocery giant.
New York’s Department of Consumer Affairs (DCA) in effect has declared war on the retailer. “Whole Foods has stated they would never intentionally overcharge customers and yet our inspectors repeatedly found these violations at the city's stores," said DCA Commissioner Julie Menin in a statement this week. "The potential number of violations for all pre-packaged goods in the NYC stores is in the thousands.”
DCA added in a statement: “89% of the packages tested did not meet the federal standard for the maximum amount that an individual package can deviate from the actual weight... The overcharges ranged from $0.80 for a package of pecan panko to $14.84 for a package of coconut shrimp.”
There is another side to this story. Whole Foods, in a statement, fired back: “We disagree with the DCA’s overreaching allegations, and we are vigorously defending ourselves. We cooperated fully with the DCA from the beginning until we disagreed with their grossly excessive monetary demands. Despite our requests to the DCA, they have not provided evidence to back up their demands nor have they requested any additional information from us, but instead have taken this to the media to coerce us.”
A third side is that in an investigation of its own, the New York Daily News found that in at least some cases items at Whole Foods were misweighed in the consumer’s favor. It found mini roast beef sandwiches, for instance, that were priced at $3.49 for 3 ounces - but the sandwiches actually weighed 4.5 to 5.1 ounces. Breaded chicken breasts, the Daily News added, were all priced at $5.99 for 7 ounces - but the actual weights ranged from 6 to 9.2 ounces.
Even so, Whole Foods has a weighing problem that goes beyond New York City. In June 2014, in Los Angeles County, Whole Foods agreed to pay $800,000 to settle complaints filed by several city district attorneys alleging overcharging. In a statement, Adam Radinsky, head of the consumer protection unit of the Santa Monica City Attorney's Office, noted: “Inspectors found that Whole Foods was charging more than the advertised price for a wide variety of food items.”
Radinsky itemized Whole Foods' short-comings: “Failing to deduct the weight of containers when ringing up charges for self-serve foods at the salad bar and hot bar...[and] Giving less weight than the amount stated on the label, for packaged items sold by the pound.”
As bad as all the evidence sounds, Kevin Hoult, a onetime district manager for a regional grocery chain, predicted that Whole Foods' problems will blow over. He explained: "It will likely only impact share price briefly, because the majority of consumers don't really care that much about packaging W&M [weights & measures] issues."
So the real money question is: how will consumers react? The verdict currently is mixed. For every consumer who said he was over Whole Foods, there are others who offer hedged opinions.
“I go there [Whole Foods] for things I can't buy elsewhere -- chocolate, a wonderful cheese selection, herbs and vegetables Kroger doesn't carry, a nice wine selection and baked goods that make me drool," said Jennie Phipps, who operates the Freelance Success website in Michigan. "They are all expensive. I hope my nearest Whole Foods isn't cheating me, but if it is, I won't go elsewhere. In my world, there really is no elsewhere.”
Ken Montgomery, an executive vice president at IT company Persistent Systems, characterized himself as a “brand loyalist” and said of the allegations about Whole Foods and prices,”Sloppy doesn’t bother me.” He went on: “I think every chain has this going on.”
Marketing consultant Rachel Weingarten in Brooklyn offered a nuanced opinion: “I've always thought that everyone assumed that Whole Foods was inflating their prices. I know that I did. I figured it was accessible snob appeal that dribbled down to the masses.” She added: “I'm not a full time Whole Foods devotee, but I am a fan.”
Bev Bennett, a Chicago-based food writer, offered what may be the Whole Foods shopper's survival credo: "Does it bother me as a regular WF shopper? Not especially." But that's because she shops there with watchful eyes. She explained that when she buys fresh salsa at Whole Foods, for instance, "the label says 8 ounces for $3.99. But I can see from the salsa containers stacked up that they're not evenly filled, so I take the one with the most salsa."
Correction: June 27, 2015
An earlier version of this story included a statement from 5W Public Relations in New York that was unauthorized and doesn't reflect the opinion of the organization.