Whole Foods demonstrated questionable ethics by not properly training staff to label foods that are priced per pound, which resulted in price gouging. It was revealed by an investigation by the NYC Department of Consumer Affairs that some items were priced over $4 more than the weight in the package dictated (Casey, 2015). This allegation against Whole Foods was revealed almost exactly a year after they faced punishment in California for similar mis-charging (Rylah, 2014). The article by Casey (2015) interviewed an employee who said that this scandal was a result of the company eliminating a position that was focused on checking scaled weights and relying on improperly trained part time employees to save on labor costs. The California investigation ended with a levy of fines totaling over $750,000, so it is questionable whether they saved that much in the end (Rylah, 2014).
Initially, after the NYC claims Whole Foods denied wrong doing and customers took to Facebook to complain (Peterson, 2015). Whole Foods already had a reputation for high prices that they justified with their commitment to organic and sustainable products and fair wages to farmers. However, they changed their tune a couple of days later and the CEO’s put an apology video on YouTube (Meyers, 2015). The apology received mixed reviews on social media, some accepted as sincere and some customers were still enraged as they were not seeing any direct refunds. In general, releasing one response and then changing your mind will decrease trust in the company. That is why Whole Foods had to commit to publish independent auditing and a review of new practices in 45 days in an attempt to earn back customers trust. This crisis is a clear result of putting profit over values and one that we see play out frequently in Corporate America. However, Whole Foods had placed itself on a pedestal of good values in order to charge more which meant they had farther to fall.
