MISSION INTANGIBLE

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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Mostly Whole Foods

C. HUYGENS - Wednesday, July 08, 2015
The irony is lost on few. Whole Foods, derided for its high pricing with the moniker, Whole Paycheck, is challenged with providing all the product. According to New York City’s consumer chief, Whole Foods has been found guilty of overcharging prepackaged meat, dairy and baked goods with inconsistent weights.

People Magazine's friendly summary of the  practice: "Although Whole Foods has not been fined because of the ongoing investigation, the upscale store has thousands of potential violations, says the department. To put that into perspective, the fine for falsely labeling a package can be as high as $950 for the first violation with subsequent violations requiring a company to pay up to $1,700 in penalties."

IJ Review's less polite commentary. "The NY Daily News reported that investigators found 80 different items that were labeled incorrectly. DCA Commissioner Julie Menin said 'it was the worst case of overcharges that they’ve ever seen.'”

Just last year, a California-based Whole Foods was subjected to pay a penalty of $800,000 due to similar pricing irregularities.

The irony runs deeper. CEO John Mackey is one of the leading voices for a movement called "Conscious Capitalism," wherein corporations focus on purpose instead of profit.

Described in December/January 2010 issue of Fast Company magazine, "Conscious Capitalism underscores the importance of all of a company's interdependent "stakeholders": employees, customers, shareholders, suppliers, community, and the environment. When all of those constituencies' interests are factored into the company's decisions and aligned, his (Mackey's) thinking goes, all — including, not incidentally, the bottom line — will flourish."

It is only fair to turn to the reputation value metrics as see what insight can be gained on the current expectations of those interdependent stakeholders.

Reputational value has been slipping exposing a reputation dependency in the company's market cap of around $1.4 billion or 10% of the firm's value. The Value Risk is high in the 73rd percentile among 48 peers. This indicates that the interdependent stakeholders are confused--a reasonable state of cognitive dissonance given historic expectations and current reality.

Algorithmically, all this uncertainty produces an overall reputational health metric of 54% of its maximum, meaning, investors are also apparently being short-changed.


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