Whole Foods’ Overcharging Lawsuit Revived
A federal appeals court on Friday ordered Whole Foods Market Inc. to face a proposed class-action lawsuit accusing it of overcharging shoppers in New York City by overstating the weight of pre-packaged food in its supermarkets, according to news reports. The 2nd U.S. Circuit Court of Appeals in Manhattan said on Friday that a lower court judge had erred in concluding that the plaintiff, Sean John, had no right to sue because he couldn't show that Whole Foods overcharged him for a specific purchase. John sued one month after New York City's Department of Consumer Affairs in June 2015 said all 80 prepackaged foods it tested from Whole Foods had mislabeled weights, and 89 percent failed to meet federal labeling standards. Overcharges ranged from 80 cents for pecan panko to $14.84 for coconut shrimp. Whole Foods agreed in December to pay $500,000 to settle with New York City, following apologies from co-chief executives, John Mackey and Walter Robb.
Total Retail’s Take: This recent development can’t be good news for Whole Foods, as the grocer is already struggling to reposition itself in an increasingly competitive grocery market, particularly online. Following calls from several investors to shake up operations or sell altogether this year, Whole Foods has unveiled an accelerated growth plan supported by category management and pricing initiatives, enhanced marketing and affinity marketing programs, and “disciplined organic growth.”