The Case for Routine Hardware Security Audits and Inspections

By Vladik Rikhter

credit-card-pos.png

Part of modern day security is a company’s ability to combat scams that aim to take advantage of customers. It’s in the best interest of any company because a brand’s success is often built on basic trust. When customers shop at a store or eat at a restaurant, they expect a secure transaction.

For some companies, changing technology has made it more difficult to keep up with scammers. The problems for a company’s image are two-fold:

  1. Scams display weaknesses in security systems.
  2. Reports of customers being scammed spread rapidly around the Internet.

It’s now more important than ever to make sure that your business is up to date with technology auditing, and keep customers informed of breaches in security.

How Skimming Works

Most of the scams that occur inside retail locations require inside knowledge of the company’s mechanics. The thieves open the card processing terminals at a checkout lane and install a skimming device that sits underneath the keypad. The apparatus then steals account data when customers swipe their cards at the register.

Sometimes, thieves place a hidden camera in order to record personal identification numbers. The camera may be hidden in the ATM, or even just to the side inside a plastic case holding other items. Other skimmers install a fake PIN pad over the actual keyboard to capture the PIN directly, so a camera is not needed.

Regardless, employees and managers should be trained on how to detect ATM tampering. It comes down to knowing what to look for when inspecting machines. PC Magazine offers more specifics here.

If a breach is confirmed, companies must be fully transparent in notifying customers. Here’s a case-in-point:

Safeway Loses Safety Points

In some parts of Colorado and California, the grocery chain Safeway recently had issues with scammers who “skim” for PIN and credit card numbers.

The company released a statement concerning the fraud:

"Like all responsible business owners, our store teams routinely inspect all point-of-sale devices and discovered the three skimmers during these inspections. When our store teams find evidence of criminal activity like this, we have been able to pinpoint with surveillance video when the devices were installed and how many transactions were processed.”

To Safeway’s credit, the breach was detected during a routine audit. However, the company chose not to notify customers immediately, deferring the problem to banks. A spokesperson said Safeway’s internal security team did not want to alarm customers and possibly compromise the investigation. However, that decision backfired with some customers.

“Oh boy does this tick me off!” wrote Larry Taylor of Lakewood, Co. “I've been shopping at the Safeway at Garrison and Colfax for about 15 years. I'm stunned that they found skimmers and didn't bother to let any of us know. Looks like it’s Soopers from now on!”

Many customers saw a company trying to protect themselves—not their security.

The Takeaway

  • Companies should make sure their ATM security is up to date and audited on a regular basis to detect fraud.
  • Tampering is detectable and employees should be trained to detect when an ATM has been tampered with.
  • Regular, routine auditing means less risk for your brand in the long run.
  • Be sure to have a plan for how your company would react in a security breach, keeping in mind that full transparency with your customers is a priority.   

Topics: Retail, Grocery

Buying Local and the Importance of Retail Signage

By Vladik Rikhter

grown-local-grocery-signage

The consumer trend of buying local has grown from being “hot” to being a central driver of growth in the restaurant and grocery retail industry, according to the results of a recent survey by A.T. Kearney. Two years ago, when the study was first conducted, local food was a differentiator for retailers—a nice offering that could set them apart from competitors. Now, merchandising local food is critical to growth.

Importantly, the study found that retail companies and grocery stores can capitalize on increased interest in local foods by highlighting products through proper signage and advertisements.

“Localvore”

“Localvore” is the term that Randy Burt, co-author of the A.T. Kearney study, uses to describe this growing trend that’s especially popular among women and Millennials. It’s a movement that demands high standards for fresh food like seafood, meat, produce, and other assorted specialty items like jams, breads, and desserts.

A recent survey conducted by the National Restaurant Association (NRA) supports the A.T. Kearney study regarding the importance of local. The NRA asked nearly 1,600 professional chefs to identify the top food trends for restaurant menus in 2016. Check out the top 5 of 20:

  1. Locally sourced meats and seafood
  2. Chef-driven fast-casual concepts
  3. Locally grown produce
  4. Hyper-local sourcing
  5. Natural ingredients/minimally processed foods.

Forty-four percent identified local sourcing as the current food trend that has grown the most over the last decade.

The key to the local movement is not only how local the food is, but also how well the food is marketed. This involves a rebranding of the term “local,” and majority rules on this issue. Of the 1,500 U.S. shoppers surveyed, 96% now describe local food as products grown or produced within 100 miles from the point-of-sale, up from 58% in 2014. Majority also rules on what “local” means to quality, with 93% of consumers now associating local with “fresh.”

And if you sell specialty foods, this should be your favorite finding from the study: 78% of consumers are willing to pay a premium of 10% or more for local food, up from 70% in 2014. Indeed, premium is on the rise with the help of the “foodie” Millennial generation!

Availability is No Longer the Issue

Access to local food is no longer the roadblock to sales; only 27% of consumers surveyed said products were not available. However, communication is clearly a problem when more than half of the respondents said that they don’t buy local due to a lack of clear advertising/in-store signage.

It’s amazing that with all of our technological advancements, a gap in sales can come down to the basics of a misplaced sign! That may be the bad news, but the good news is that the problem is completely avoidable and/or fixable with greater oversight.

“Did You Find What You Were Looking for Today?”

Make Local Food a Priority: Consumers are drawn to local food and will pay a premium for it. Call attention to your offerings! It’s in the retailer’s interest to properly place signs designating where local food is available.

Get the Basics Right: Don’t just issue a memo or mass email hoping your managers take notice. Take action! Audit your stores in a way that includes promotional/signage auditing. Document store compliance and address issues at the store level.

Help your customers easily find their favorite local foods, and you may just become their favorite local store.

Topics: Retail, Grocery

Store Associates are the Biggest Influence on Customer Loyalty

By Jennifer Hoffman

grocery-employee

If I was a supermarket manager, I would call my associates together for a special meeting about the results of this study. I’d want my employees to know that they have the biggest influence in a customer coming back to our store. My employees are not only important—they’re THE most important part of the customer’s shopping experience!

Now in its eighth year, Retail Feedback Group's (RFG), 2015 U.S. Supermarket Experience Study found that supermarkets have the most success with the most customer satisfaction, scoring an average of 4.44 on a five-point scale, where 5 is the highest score.

Areas of Excellence and Improvement

Shoppers rated supermarkets highly in key customer service areas, including feeling like a welcome guest (4.70), deriving food expertise from store associates (4.66), and encountering exceptional service (4.66).

The two highest-rated core experience factors were quality/freshness of the food and groceries (4.47) and cleanliness of the store (4.44). High marks were given to friendliness and attitude of the store personnel (4.43) and the speed and efficiency of checkout (4.41). However, helpfulness and knowledge of personnel (4.35) scored a lower rating, as well as availability of personnel to provide assistance (4.26).

“Our findings show that two of the three lowest-rated areas among the core experience factors are people-related – helpfulness and knowledge of personnel and the availability of personnel to provide assistance," said Doug Madenberg, RFG principal. "It is important to strengthen these areas, especially considering how store associates can positively influence overall satisfaction.”

The Takeaway

Customers want to feel at home when they’re purchasing groceries. The more at home they feel —from the moment that they step into the supermarket to the moment they step out of the door —the more loyalty they’ll feel to that store and the brands that the store sells.

One of the ways to enable personal interaction between employees and customers is to upgrade technology so that tasks that formerly had to be done on ink and paper can be done with more efficiency. With mobile technology, managers free themselves from desks and workstations and automate processes. This results in more time to help customers and more time with associates.

Associates will become more knowledgeable and helpful when their managers are a visible presence in the store, leading by example—not just by directive.

Think it will cost you a lot of money to upgrade to mobile technology? Think again!

Check out our post on enacting a Bring Your Own Device (BYOD) policy.

Topics: Retail, Grocery

Zenput Moment: Taking Wegmans’ Temperature

By Brian Harris

On a recent visit to the East Coast, I had what I like to call a “Zenput moment.” We’ve come to define a Zenput moment as a real-life shopping experience in which retail execution could have been improved with Zenput.

If you live on the West Coast you may not be familiar with Wegmans. Other than being the second happiest place on Earth, Wegmans is part grocery store, part café. Some stores even have restaurant concepts. I visited a store with a standard Wegmans Market Café, which had about four different buffet areas: Thai/Chinese food, homemade pasta salads/Italian specialties, traditional salad bar, and appetizer foods (mozzarella sticks, hot wings, etc.).

My Zenput moment occurred when I was filling a to-go container. That’s when I saw a Wegmans employee using a food thermometer and a personal digital assistant (PDA). I watched as he used the probe of the thermometer to check the temperatures of the chicken, fish, and other items on the buffet line. He was methodical and recorded the reading he received on the PDA.

As a customer, this is something I like to see. The employee of a food establishment I frequent has been trained to properly monitor food temperatures and audit buffet operations. This makes me feel good about eating here. However, as a Zenput advocate, I couldn’t help but notice areas of improvement in this process.

Why have employees use a clunky PDA when they can use their own mobile device?

Think about it. First the employee had to learn Wegmans’ process for auditing food temperature. Secondly, he had to learn how to use the PDA. This device looked about as nimble as a Texas Instruments calculator I used in high school.

I think of the feedback we’ve received about Zenput thus far. Many of our customers report that the platform was so easy to use, minimal to no training was required. That’s because they’re using their favorite mobile devices to fill out a digital form on a mobile app. It’s a 21st century setup they’re comfortable using.

Also, what happens to the PDA files? Are they exported and emailed? Using a mobile device with a cloud-based app makes more sense. If everyone is accessing the same mobile platform, it’s easy to call up information on your preferred device. When is the last time you were in a meeting and the management team took out the cumbersome PDAs you see in retail stores?

I propose a new Golden Rule of retail technology: If you don’t find the digital device comfortable to use, don’t make your employees use it!

Food safety is important and requires attention, and I wanted to let the Wegmans employee do his job. I should have asked him if the thermometer and PDA were “talking to each other.” The wireless PDA was most likely (let’s hope for his sake) recording the results of the thermometer reading automatically, cutting down on a time-consuming step that’s prone to human error.

I saw the Wegmans employee pick up and place down the PDA multiple times, and use two thumbs to type. It didn’t look very comfortable. That was the culmination of my Zenput moment. For the employee’s sake, I hope his managers let him use a smartphone app soon!

Learn more about Zenput’s integration with ThermoWorks’ BlueTherm Bluetooth Probe by clicking here.

Topics: Grocery

How Fresh is Your Retail Cold Case?

By Jennifer Hoffman

grab-n-go-sandwiches

Cold cases are one of the most important areas in the convenience retail business and also one of the most crucial to maintain. Having fresh, grab-and-go food is challenging, but when done correctly, this offering can yield healthy profits.

Unlike a store shelf or beverage cooler, the cold case is not an area of your store that you can simply “set and forget.” Store employees must regularly audit this area for three things:

  1. Appearance of the food
  2. Date packed and freshness
  3. Temperature stored

Before we discuss these factors, here’s a brief list of some of the foods commonly seen in a cold case:

  • sandwiches
  • wraps
  • salads
  • sushi
  • fruit/cheese cups
  • hard-boiled eggs
  • yogurt

Appearance of the Food

Does the food in your cold case look appealing? I’ll use an example from my own travels: a brie and apple sandwich on raisin bread. Sounds tasty, but the cheese looked moldy and the apple made the bread look soggy. In this case, the upsell on premium ingredients didn’t work.

Food doesn’t need to look completely gross not to sell, either. It can just look disproportionate. Is your parfait mostly granola and little fresh fruit or yogurt? Does the turkey sandwich look mostly bread with a chunk of meat crammed in between the slices? Poorly assembled food won’t sell, either.

Careful on quantity: Your cold case is a focal point of the store and should appear as a cornucopia of goodness. It’s a bit of a balancing act to not only offer items in quantity, but also to make sure that it doesn’t appear messy. Also, overstocking goods can lead to a risk of some items not receiving adequate refrigeration. Make sure items stay in contact with the cold surface of the case.

Date Packed and Freshness

When I picked up that apple and brie sandwich, I, like most customers, checked the date of the freshness before making a purchase. It’s important for retailers and QSRs to make sure that every date is checked and rechecked. Old or molding food can be a health hazard, but it’s not as simple as just keeping records of “best by” or “sell by” dates. Food safety really starts in the kitchen with monitoring food storage temperatures.

See also: Conducting a Food Safety Audit: 7 Principles of HACCP

Temperature Stored

Fact: Refrigerators grow old, break down, and can prematurely spoil food that requires storage at a certain temperature. Check whether or not the temperature in the cold case is set correctly. Again, this audit carries to the back of the house, where ingredients are stored.

See Also: How to Calibrate a Kitchen Thermometer

In addition, cold case dairy products, pudding, yogurt and cheese are all hypersensitive to mold, and should be regularly checked. The coldness of the case will also affect the freshness of fruits and vegetables, including the lettuce in wraps and salads.

Make sure your refrigeration is up to date and make sure that the salads, wraps, and yogurts are being stored correctly. Check labels and check the refrigeration daily as part of the self-auditing process for the store.

The Takeaway

Customers rely on cold cases for a quick selection and fresh food. They are supposed to serve as an antithesis to greasy, hot fast-food. It’s imperative to deliver on that expectation of fresh ingredients. Create checklists that account for each of the items in your cold case and audit daily for appearance, freshness, and storage.

Topics: Grocery, C-store

3 Tips for Operating a Buffet Foodservice Operation

By Jennifer Hoffman

buffet

In the foodservice industry, a buffet is an easy and lucrative option for serving customers because it gives them a level of control in choosing what and how much food they want to consume. Buffets are rising in popularity in places like grocery stores and supermarkets, where fresh ingredients are readily accessible and customers are looking for quick meal options.

When operating a buffet cleanliness, security, and maintenance are all top priorities; however, it’s also important not to waste food. As much as all of the procedural work is tedious, it’s imperative to a successful business.

As this post highlights, customers notice if buffets are not up to scratch or wasteful, and it’s important to keep an eye on your staff and the way the food is presented. Customers care what their food looks like, and how sanitary or wasteful a business comes off can impact the image of a restaurant and possibly the brand image.

Below are three simple ways you can make your buffet less wasteful and look more professional. If you do, publicize that partnership because it resonates with today’s customers, especially socially conscious Millennials.

1. Monitor Food Inventory

One of the most difficult aspects of maintaining buffets is monitoring your food inventory. If you’re not careful, generating unnecessary waste can hurt your bottom line. Customers can also notice when a half eaten tray is hauled off to the trash. This is where communication between retail associates in the vicinity of the buffet, employees in the kitchen, and management is key. Regularly documenting which items are more popular can help foodservice operators adjust their offerings and increase profits.

Also consider partnering with a local charity organization that accepts food donations.

2. Make Checklists

Foodservice operations must abide by state and local regulations. These regulations, like this example from San Diego, should be converted to food safety checklists. Safety matters, from food preparation to presentation to storage. Here are just some examples of checklist bullet points or questions:

  • Are food preparation surfaces clean?
  • Is the floor clean?
  • Are refrigerators set at the right temperatures?
  • Are handwashing facilities functional and are sneeze guards regularly cleaned above the buffet service areas?

Checklists and charts can also help managers keep food fresh by monitoring how long it has been on the buffet line. Employees, particularly managers, should know where these checklists are and how to access them. This ties into a final point:

3. Conduct Daily Audits with Actionable Results

Procedural codes and filling out checklists are one thing, but self-auditing in a way that leads to actionable results can put your buffet ahead of the pack.

Let’s consider some scenarios. It’s late afternoon on a busy weeknight, and you’re already running out of fresh produce before the 9-5 p.m. crowd comes in for dinner. What does your manager do? Instead of panicking, they report the issue and senior management arranges for an employee to make a delivery to a store. The manager and employees don’t have to go shopping during peak hours.

Let’s say a fryer fizzles out or a row of heat lamps suddenly lose power. The issue in reported in real time. Rather than a series of calls and emails, the task is prioritized and someone from maintenance is assigned to the store immediately. Communication is so much less tedious when you have the right tools.

And please, as with any foodservice operation, don’t forget about the cleanliness of your restrooms!

Related Post

Conducting a Food Safety Audit: 7 Principles of HACCP
How to Conduct a Property Inspection

Topics: Restaurants, Grocery, C-store

Another Supermarket, Another Devastating Price Auditing Stumble

By Julia Burnett

haggen-sign

Earlier this year, Pacific Northwest-based grocery chain Haggen Inc., announced it would acquire 146 stores as part of the divestment process brought about by the Federal Trade Commission review of the Albertsons LLC and Safeway merger.

With this acquisition, Haggen expanded from 18 stores with 16 pharmacies to 164 stores with 106 pharmacies, and from 2,000 employees to more than 10,000. It went from operating in Oregon and Washington to becoming a major regional chain in Washington, Oregon, California, Nevada and Arizona. Haggen embarked on its plan to remodel and rebrand the stores at an ambitious pace-—between one to 12 stores each week.

The expansion took many by surprise, considering that Haggen had closed 12 stores since 2011 after a private investment firm Comvest Group took a majority interest in the chain. It doesn’t sound like this was a retailer poised for 800% growth overnight—and it wasn’t.

In August, Haggen announced it has to shut down 27 of the stores it acquired, including 16 in California.

What went wrong?

Rising Star, Falling

When Haggen debuted in some markets, its products were mistakenly overpriced. To be exact, 1,000 items — or about 2.5% of a store's products — were erroneously overpriced at 10 supermarkets in Los Angeles, Orange and San Diego counties, reported the Los Angeles Times. According to analysts, Haggen never fully recovered from this stumble.

Much like the recent Whole Foods pricing scandal, some of items were incorrectly underpriced as well.

The error was attributed to a computer glitch and took weeks to sort out, Haggen Pacific Southwest CEO Bill Shaner said. He added that the company regularly checks prices at rival stores to make sure it’s within a few cents of similar items.

This information begs an important question: If Haggen truly checked its prices regularly and responded to shifts in prices, why did it take so long to sort out item pricing at the point-of-sale?

Backtracking

Mistakes happen, but it’s all about how you deal with them.

Here’s are some what-if hypotheticals about what Haggen could have done differently: 

  • What if Haggen had deployed an aggressive strategy of self-auditing prices when it first noticed the problem?
  • What if Haggen assigned store managers or assistant managers to be pricing ambassadors to communicate to customers that a transitional error was happening? These ambassadors could have warned customers of the glitch as they approach the point-of-sale, and encourage them to check their receipts. Combine that with ramped up customer service presence until the computer glitch is resolved.
  • What if corporate has a way of quickly notifying store managers to adjust the prices of a specific product? Since the error was confined to the Southern California market, the idea isn’t completely unfeasible.

Haggen said it will now focus on its “right sizing strategy” but it’s unclear if the company will ever again become a big player in the West’s grocery industry.

If there’s something to learn from Haggen’s missteps and subsequent downsizing it’s this:

Recognize Customer Expectations
Customers recognize overpricing and it’s important to research pricing of competition. Just because a grocer caters to a niche audience doesn’t mean that customers will blindly dig deeper into their pockets.

Employee Self-Auditing
Employees notice when prices are too high as well, and often, employees shop at the stores where they work. Training employees to self-audit may have helped Haggen adjust erroneous prices.

Sample Supermarket Inspection Checklist

Topics: Grocery

Growing Specialty Grocery Industry Puts Whole Foods Against the Ropes

By Jennifer Hoffman

whole-foods-exterior

I don’t usually cringe when I read something a CEO says because they’re usually very careful; however, this was one of those exceptions.  In January, I came across a Phoenix Business Journal article, “Why Whole Foods’ CEO Isn’t Worried About Sprouts.”

The story centered around Whole Foods competing with Sprouts Farmers Markets Inc. in the Phoenix market, and the quote was as bad as the headline sounded.

"They've done well,” Whole Foods’ co-CEO Walter Robb said about competitor Sprouts. “They are not Whole Foods. They don't have the same standards, though sometimes they would represent that they do. We are going to continue to be the leaders in this space. We are the leaders, we'll continue to be the leaders." He added that his remarks were a “competitive throwdown.”

To me, Robb’s comments embodied something that I warn our customers about: Success breeding false confidence. Fast-forward eight months later, and Whole Foods’ growth sales are suffering due to increased and well-positioned competition, as well as a pricing scandal that was avoidable.

In response to its competition, the grocery retailer will open smaller-format stores called 365 by Whole Foods with more competitively priced items geared towards a younger generation of shoppers. It’s a major investment, but it’s a gamble Whole Foods has to make if it hopes to survive, especially considering the fact that German competitor Aldi, known for its curated product selection and reasonable prices, plans to operate 2,000 stores in the U.S. by 2018.

Company Culture is the Saving Grace

It is for Phil Lempert, a contributing writer to Forbes who covers issues on supermarket and agriculture sectors. He argues that Whole Foods’ exceptional customer service and high quality food are what used to set this retailer apart. That’s not the case anymore, as documented by Consumer Affairs.

Whole Foods simply can’t settle for the operational status quo if it hopes to continue its position as the leaders in this space, as its co-CEO said. Something has to change—quickly and drastically. and it begins and ends with fundamentals of price and quality at the store level.

Watch out for Wild Oats, warns Lempert. This is an aggressive retailer that’s in the process of converting former Fresh & Easy stores and has the possibility of teaming up with Walmart, which has been searching for a smaller format store to increase their natural/organic market share.

It’s been a tough year for Whole Foods—a retailer against the ropes. Is this a company that’s ready to swing back?

Sample Supermarket Inspection Checklist

Topics: Grocery

Supermarkets are Becoming QSRs

By Jennifer Hoffman

wegmans-exterior

I enjoy political discourse, and this upcoming election season won’t disappoint. I especially enjoy politics when it intersects with the industries Zenput interacts with: retail and consumer packaged goods.

Whether it’s Hillary stopping in for a Chipotle burrito (as previously mentioned in our blog about store video surveillance) or Chris Christie spending the equivalent of a luxury vehicle at Wegman’s supermarkets, it’s fun when politics and consumer habits intersect.

Wait just a second—Gov. Christie’s administration spent how much at Wegman’s? To be exact, it was around $76,000 over 53 trips, The New Jersey Watchdog reported. This story, of course, set off a firestorm on social media. No matter how you feel about politicians’ grocery bills, some people seem to forget—or perhaps don’t realize—that the Governor hosts events at his official mansion in Princeton and the administration picks up the tab for catering.

That’s right—Wegman’s, the supermarket chain, does catering! It also offers seating like a quick-service restaurant. When you factor in these services, you begin to realize that Christie didn’t just spend an exorbitant amount of money on CPGs like Cocoa Puffs and tomato sauce.

Channel Blurring With QSRs

Wegman’s—and supermarket chains like it—are becoming QSRs. Whole Foods is similar to Wegman’s in that it offers freshly made food and also offers cafe-style eating in its stores.

Even when grocery stores don’t have the capacity for seating, they can draw QSR customers into their stores by offering competitively priced ready-to-eat or ready-to-heat meals. Supermarket chain Safeway takes a page right out of the QSR playbook, writes  Steven Johnson, a grocerant guru at Foodservice Solutions. The grocery chain offers lunch combos and family-sized value meals.

It’s not just the big players who stand to profit. Take for instance Green Zebra Grocery of Portland, Ore. This small business makes speciality paninis and sandwiches to order, as well as a prepared hot food and salad bar. Green Zebra also makes an effort to offer local and organic foods, and offer gluten-free options. I was recently impressed by a local Italian market. I was able to not only pick up a quart of milk, but pick up a ready-to-heat dinner—a very convenient option after a long day.

Addressing the Challenges of a Dual Business

Of course, any grocery store that expands into freshly prepared foods has to be ready to deal with the challenges of operating a QSR in addition to the challenges of operating a retail operation. The businesses must compliment each other, the food options must be strategically placed in the store and well promoted. Items have to be accurately priced accurately for the point-of-sale, in order not to cause a Whole Foods-like scandal. A part of your workforce will likely be dedicated to running the QSR side of the business to ensure  food quality and safety.

Basically, accountability and communication increase whenever freshly made food is involved.

Check out our other blogs on grocery and restaurant topics:

Topics: Grocery

Whole Foods’ Pricing Error Shouldn’t Have Been a Scandal

By Vladik Rikhter

whole-foods-market-nyc

It’s that awkward moment when a state agency has to point out that you’re ripping off your customers. That’s the embarrassing situation Whole Foods Market Inc. found itself in when the New York City Department of Consumer Affairs announced it was investigating Whole Foods after finding that the company’s local stores routinely overstate the weight of its pre-packaged products.

Examples of the overcharging included a vegetable platter that was overpriced by $6.15; an average overcharge of $4.85 on a bag of chicken tenders; and a package of berries that were overpriced by $1.84. The most egregious was a $14.84 overcharge for a package of coconut shrimp.

“Our inspectors tell me this is the worst case of mislabeling they have seen in their careers, which DCA and New Yorkers will not tolerate,” said DCA Commissioner Julie Menin. “As a large chain grocery store, Whole Foods has the money and resources to ensure greater accuracy and to correct what appears to be a widespread problem—the city’s shoppers deserve to be correctly charged.”

Ouch. This is no longer just a company error; it’s an issue of brand trust. The scandal immediately put Whole Foods on defense, prompting its co-CEOs to release a video apologizing and setting forth three initiatives to fix the problem:

  1. Increase employee training.
  2. Implementing third-party auditing system.
  3. Giving items for free if they are incorrectly labeled.

It’s a good-intentioned plan that’s a little too late, considering the damage has already been done. Whole Foods’ sales growth slowed sharply last month following the allegations.

Self-Auditing Would Have Prevented This Problem

Whole Foods’ leaders chalked up the mistakes to their hands-on approach to making the food. In fairness, some of these mislabeling mistakes benefited the customers, and they lost money on certain transactions. Still, it begs the questions: Why not take a hands-on approach to checking your work?

Had Whole Foods had an employee-led, self-auditing system in place, these errors would have been identified before the public shaming. Surely, responsible employees would have noticed that the overcharging was prevalent among packages that had been labeled with exactly the same weight, considering it’s practically impossible for all the packages to weigh the same amount, as the DCA pointed out.

If enough of these issues were reported internally, surely it would have gotten the attention of a senior executive and led to a proactive—rather than reactive—response.

Considering this is not the first time Whole Foods has faced this issue, it may be time for some more drastic internal self-auditing measures. Whole Foods has an opportunity to do that with the opening of its new 365 Market by Whole Foods concept.

The pricing scandal may have lost some customers for good, but it’s not too late for Whole Foods to gain and keep the trust of new customers in new markets.

Topics: Grocery