"The latest move by Amazon to establish itself as the dominant retailer-both online as well as in the physical world of brick and mortar retail-shows the lengths it will go to destroy competition at any cost in its longstanding battle with Wal-Mart to become the nation's largest retailer", said Appelbaum in an emailed statement.
And that quote came just before a jaw dropping announcement Friday morning: Amazon is buying Whole Foods and its 460 stores for $13.7 billion.
That changed on June 16 when Amazon announced its intention to acquire Whole Foods, the upscale supermarket chain that played a pivotal role in taking organic and natural foods mainstream. I don't see the stock dropping much further than this, so if you want to get in, now might be the best time. Amazon's logistics, and extensive automation and technology can make Whole Foods more economically accessible.
Portfolio managers at Riverpoint Capital Management said the market overreacted to last week's double whammy of bad news for Kroger. The company is likely to squeeze makers of packaged goods - from canned soup to cleaning products - to help make lower prices part of their competitive edge.
"We're becoming a giant corporation in the USA", she said. Should stores be laid out more like warehouses, to optimise for online delivery? It does well if you live in the right place. "It's a bit unsettling".
Amazon's acquisition of Whole Foods in the U.S. increases the likelihood that the grocery market is on the list of targets when it launches in Australia. Fundamentally, the new owner of Whole Foods will have a different time horizon for success than Whole Foods experienced, particularly in recent years when growth slowed, he said. "We do have an aging population". However, they will need to be quick and develop new business models.
"It seemed highly unlikely", Bartashus said.
Amazon's bid to buy Whole Foods isn't actually a threat to Walmart at all, but just an indication of the Amazon's recognition that it would never be able to scale its food business without a brick-and-mortar presence, he said.
Trader Joe's and specialty grocers such as Sprouts Farmers Market, Fresh Market, Earth Fare and, of course, Whole Foods, also have made aggressive pushes into the metro market. Amazon is entering a fiercely competitive sector that has painfully slim margins and large, entrenched, and efficient competitors including Wal-Mart, Kroger, and Costco. Instacart takes online orders for Publix products, fulfills them through its own store-based shoppers and delivers the order to the customer's home for a fee.
"Many of the independent restaurant operators are going to club stores where they can get lower prices", said Pawlak.
It's estimated that Whole Foods has lost up to 14 million customers in the past two years as Kroger and Aldi offer cheaper versions of the same product. Walmart, the nation's biggest grocer, reported about $200 billion in grocery sales in 2016, or almost one-third of all grocery sales revenue, compared to $15.7 billion for Whole Foods, CBRE says. He added that these are likely the higher-income households who tend to buy more expensive brands and cuts of meat.
But Springer also agreed with those buzzing analysts who've predicted the proposed deal could lead to disruptive changes in US supermarkets and e-commerce. "We're not Whole Foods people and Amazon people".
The pending union between Amazon and Whole Foods comes after months of public pressure by investors - including from Jana Partners, with an 8.8% stake in Whole Foods, and from Neuberger Berman, with a 2.7% stake - on the company to explore selling.
That, in turn, could help Amazon do better with pricing and promotions, branding and the overall store experience, said Robert Hetu, a retail analyst at Gartner. All of a sudden, Amazon has hundreds of perfectly located pick-up points thanks to Whole Foods.
Huddleston said it would be at least a few years before the effects of the deal are truly felt as the companies work out their business.