Amazon might. Besides, having already paid for Whole Foods in one day on Wall Street, it has nothing to lose in trying. With Amazon's help, the chain may be able to set itself apart again with technology.
Is there a risk that increased automation will lead to job losses at Whole Foods, an issue facing the entire economy in coming years as more tasks are replaced by robots? The financial markets reacted violently and the headlines talked about revolution and disruption. Under the old model of food retailing, "the brand you trusted was the manufacturer", Ronen says. Jeff Bezos not only shifted how and where books were sold; he also changed how they were made, by forcing publishers, authors, and everybody else along the book supply chain to cut their costs. And you can have your groceries delivered at no additional cost. In a larger sense, all physical retail needs reimagining.
But topping Amazon's bid would be hard for any of them.
Mark Toro, managing partner for developer North American Properties in Atlanta, called the Whole Foods deal "a validation of bricks and mortar retail". Shoppers must use the Amazon Go app, which features "just walk out" technology that automatically detects all the products they've taken off the shelves. This may partially solve its costly "last mile", even beyond its food sales.
But Springer cautioned that other factors might have affected the stock prices.
Supermarkets are also pretty labour-intensive. Will online food sales actually pick up? Its Amazon Elements baby wipes, introduced in 2014, have managed to capture 16% of online market share, despite being available only to Prime members.
"The possible effects on Whole Foods alone are interesting to contemplate", Mr. Maute said.
Adding Whole Foods' selection of items to its AmazonFresh grocery-delivery service could give the company an advantage against Peapod, FreshDirect and Google, whose Express delivery service now reaches nearly 90% of the U.S. "Your regional mom-and-pop shops simply can not compete in this day and age of retail where the innovation in supply chain and technology is so sophisticated". It has an overabundance in funds. This has seen the share prices of incumbent retailers in Amazon's core categories of electronics and fashion negatively impacted over the last 6 to 9 months.
Innovation penetrates most industries from the outside, like Google and Tesla's impact in the automotive industry. Remember the company's original disruption: bookselling.
Portfolio managers at Riverpoint Capital Management said the market overreacted to last week's double whammy of bad news for Kroger. Conversely, both Amazon and Whole Foods are close to saturation among the high-income households which represent just 26 percent of the USA population.
Kroger's wealth of grocery data would benefit Whole Foods, which seeks to rationalize its pricing and store merchandising.
Of course, a union with Amazon could hurt Whole Foods' image on food quality.
Many experts believe Amazon would use its vast distribution system to help streamline Whole Foods' operations. "It suggests that consumer behavior has gone mainstream in terms of buying those types of products online".
This recent history makes the $13.4 billion purchase of Whole Foods by Amazon that much more exciting. However, the revelation that Walmart had bought fashion retailer Bonobos barely even made headlines... "For example, the consumer perception of Whole Foods is that it is overpriced". At first glance, the consequences will play out in the United States.
Still think Amazon should be broken up? While the company is now experimenting with the way it displays ads and its impact on customer experience, the analyst believes that advertising is likely to remain a potential revenue driver going forward. This is a global company we are talking about.
Whole Foods has said it will continue to operate stores under the Whole Foods Market brand, and that John Mackey will remain chief executive. But this didn't stop Whole Foods' shares from soaring 30% or Amazon's shares from rising 2%.
Mr. Sebastian wrote that "We view Amazon's ability to rapidly scale its air cargo investment as an indicator of the company's logistical sophistication, and should widen the competitive moat relative to other sub-scale retailers that rely on third-party carriers". In short, there are plenty of reasons to become nervous.