"The conventional grocery store should feel threatened and incapable of responding", Wedbush Securities analyst Michael Pachter said.
"I would expect to see some of the other traditional grocery retailers make some investments in technology and buy some technology startups that can help them kind of create a similar offering to what this Amazon/Whole Foods offering would look like", Bunch said. Amazon's stock, which recently traded over $1,000 for the first time, rose $23.54, or 2.4 percent, to close at $987.71. Whole Foods CEO John Mackey had lambasted the hedge fund as "greedy bastards."
Any number of Whole Foods locations - more than 460 in the U.S., Canada and Britain - could be used as jumping off points for wider delivery and pickup of groceries and prepared foods ordered online. Whole Foods itself had launched an offshoot chain named after its "365" private label brand in a nod to the popularity of no-frills chains.
The Whole Foods store at the foot of the Oakland Hills is an always busy success story even as some customers expressed a range of views when asked about Friday's bombshell announcement that online giant Amazon is snapping up the specialty grocer. Walmart, which has the largest share of the US food market, has been working on lowering prices, while Target has been struggling to turn around its grocery business.
Now that Amazon is in the brick-and-mortar business selling books and groceries, who knows where it will set its sights next?
Alina Gura of Newington who was visiting the Whole Foods store with her almost two-year-old daughter, said she appreciates the quality of the food, particularly its organic products.
But is Amazon turning into a monopoly?
Amazon is considering extending the cost-cutting effort with the no-checkout technology it's developing at its Seattle convenience store, "AmazonGo", according to the person familiar with the matter, who asked not to be named because the plans are private.
The Amazon Go pilot store allows customers to choose items and then pay the bill automatically by just walking out of the store, all without going to a cash register. In order for Amazon to get the volume growth they are looking for, fresh foods has to be part of the equation.
But despite the Whole Foods acquisition and, by extension, the potential technology Amazon could implement in brick-and-mortar outlets, the company said it now has no plans to automate the jobs of cashiers in Whole Foods stores after the acquisition. An Amazon spokesman denied any job cuts were planned.
With the Whole Foods acquisition, analysts anticipate that Amazon will be the third largest retail grocery, behind Wal-Mart and Kroger, by 2021.
The perception for some shoppers is Whole Foods, especially in Austin, may lose some of its character. For customers, this could mean better prices and delivery options.