So WFM has been caught mis-pricing prepacked food. This is an old grocers trick. Rig the scales or in the case of butchers, the little pinky pushing down while weighing the meat. The CEO has apologized and said they will offer any item for free if the customer finds it is not priced correctly. Fair enough, but does this mean shoppers need to go in with their own scales?
Probably a short term dip on this stock. For disclosure, I do not shop at Whole Foods nor do I own the stock directly.
http://www.thestreet.com/story/13207370/1/whole-foods-co-ceos-apologize-for-overcharging-customers.html?cm_ven=RSSFeed
Comments
thank you for this. me and my hard earned money will not visit whole foods.
I have not been inside a Whole Foods Market. For fresh vegetables and fruits I prefer the stands that many places have. Prices are much cheaper.
From the Land of Linkster, here is another article. Apologies to Abe Lincoln.
http://www.chicagotribune.com/news/opinion/commentary/ct-whole-foods-overcharges-prices-20150702-story.html
Examples of past actions have mostly revolved around "tv commercials" that are too far removed from being "civil" or "appropriate" or misleading. These are all in the name of marketing their product, of course. But, many times one may scratch their head and wonder what in the hell the company was really trying to present in a positive fashion for their product.
If the company does not know you're paying attention; they will continue along their merry pathway. I suspect many of these emails never see the light of day within management of a company.
It reamains that many companies still do not understand the power of social media and the speed with which comments and concerns spread.
My inflation adjusted 2 cents worth.
Catch
One of the CEOs said this:
“We know they’re unintentional because there are mistakes in the customer’s favor and sometimes not in the customer’s favor,” said Robb.
--- That doesn't mean that it was unintentional, necessarily.
So...were the scales programmed wrong? No, because they they would be consistently off. These situations were apparently all over the place off, some in favor, a lot not in favor of the customer.
The fact that Whole Foods was fined for overcharging in California previously doesn't make this look very good.
I like Whole Foods, but I've always found their prepared stuff to be increasingly ridiculous - $9 a pound for salad bar?
The fact that they are telling people that if the weight is off they will get it for free doesn't really help because what am I going to do, go "Gee, this feels like 4.75 pounds and it's marked as 5? What if something is 4.99 pounds and it's marked as 5? It kind of opens a can of worms.
The thing with Whole Foods - and you see it in the stock price - is that they underestimated the size and speed of competition. The grocery business is hugely overcrowded and while I like Whole Foods, I really realize that there's little there I can't get somewhere else.
Finally, the thing that I don't like about Whole Foods is that they have given rise to a lot of regional/local grocery chains that are upscale and make a huge thing about the "experience". Maybe we're making too much out of food in this country and perhaps we should go back to the "eat to live not live to eat" philosophy. Plus, sometimes I don't care about service and experience. 99% of the time I just know what I want and the important thing is that I just want to get what I want and GTFO.
Whole Foods has always had a reputation for being expensive overall and they never successfully helped that. Some have said the new spin-off chain is a result of that, but had they just focused on their 365 brand more they potentially wouldn't have had to do that.
As for the spin-off, the grocery business is overcrowded already and while I refuse to buy anything perishable there (too many recalls), I otherwise like (and some people love) Trader Joe's.
I agree with the original article that Whole Foods is facing increased competition from "mainstream" supermarkets. It will be interesting to see what 365 by Whole Foods turns out to be.
Inspired name for their spin-off, isn't it?
With regard to scale malfeasance there is no excuse in this day and age for systematic mis-pricing unless your scales/system are intentionally set up to do so. Most measuring devices are quite accurate and supposedly inspected, verified and certified and again, supposedly on a regular basis.
Of course WF will give you the item for free if you catch them. They're counting on the the other 300 who paid more than they should have to be as apathetic about it as they usually are.
Marketing a place as somewhere to be seen is just another way to package conspicuous consumption. Something that's been around "forever".
From the NYTimes (linked) article: Whole Foods has been around since 1980. Starbucks since 1971. Peet's since 1966.
That's not to say that things don't change. I used to hold onto cc receipts to verify that the bank charged the right amount. I stopped when I saw virtually perfect accuracy.
To some extent, scanned price accuracy has improved as well. But not enough to walk out of a store without checking every item. Human error seems to be increasing. Like Whole Foods ringing up a purchase as one type of tomatoes when I had purchased another. (Customer service gave me the item for free.)
It's not about the money. It's the principle. As you wrote, if people don't hold stores accountable, they'll continue cheating because they can.
Vaguely recall watching a bartender somewhere in the distant (foggy) past dumping cheap stuff into an expensive bottle with the admonition: "Don't tell anybody I did that."
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BTW: A variation of the "thumb on the scale" when I was a kid was the "thumb on the dip-stick." The gas station attendant politely checking your oil placed his thumb on the dipstick to prevent accurate measurement. It would read a quart low and he'd sell you a quart of oil you didn't need. The practice was widespread and known in the trade as "short-sticking."