Whole Foods to Pay $800K for Overcharging California Consumers: Settlement
After a statewide investigation found widespread pricing violations at Whole Foods Markets in California, the company has settled with three Southern California cities and agreed to pay $800,000 in civil penalties.
The settlement was announcement Tuesday by the city attorney’s office in Los Angeles, where 10 Whole Foods stores operate. The city attorneys of Santa Monica and San Diego were also part of the lawsuit.
“We’re taking action to assure consumers get what they pay for,” L.A. City Attorney Mike Feuer said in a news release. “No consumer should ever be overcharged by their local market.”
State and county inspectors across California found that the upscale grocery chain was charging “more than the advertised price for a wide variety of food items,” according to Feuer’s office.
Whole Food stores sold packaged items with less product by weight than was indicated on labels, failed to deduct for the weight of containers for food purchased at the salad and hot-food bars, and sold items from the deli counter by the piece instead of by pound, the release stated.
Under the settlement, Whole Foods did not admit guilt, but agreed to charge accurate prices and make multiple changes at all 74 of its California stores for five years.
Whole Foods Market California, Inc. and Mrs. Gooch’s Natural Foods Markets, Inc. — which control stores in Northern and Southern California, respectively — are bound by the terms of the judgment.
The corporations must appoint two statewide coordinators to oversee pricing accuracy at California stores, designate an employee at each store to such accuracy, and conduct audits ensuring pricing and weight accuracy four times per year at each store.
Whole Foods must also pay $630,000 in civil penalties, $100,000 to a statewide consumer protection trust fund, and $68,394 in investigative costs.
In a statement issued Tuesday, the company said it strives for transparency and accuracy and has cooperated with the city attorneys.
“Based on a review of our own records and a sampling of inspection reports from various city and county inspectors throughout California, our pricing on weighed and measured items was accurate 98 percent of the time,” the statement read. “While we realize that human error is always possible, we will continue to refine and implement additional processes to minimize such errors going forward.”
Austin, Texas-based Whole Foods operates more than 380 stores in the U.S., Canada and United Kingdom; it had nearly $13 billion in sales in 2013, according to the company’s website. It is the eighth largest food and drug store company in the U.S., the site states.