Kroger Co. shares were down 13 percent.
Activist hedge fund Jana, led by Barry Rosenstein, disclosed a almost 9 percent stake in Whole Foods in April. Whole Foods over the past decade led the move into high-quality, organic food, but its growth in slowed as traditional grocers responded with similar offerings.
Last-mile delivery has always been a challenge to fresh food delivery - fresh veggies, fruits and meats can't sit on a doorstep for long before rotting, and a delivery person works slower delivering to a number of houses spread out over a given area rather than delivering to a single location. "This could revolutionize the food retail business".
Whole Foods, founded in 1978, has struggled to differentiate itself as competitors also now offer a plethora of fresh and organic foods.
Sales of Whole Foods stores that have been opened at least a year fell 2.5% in 2016. The price represents a 27% premium to Whole Foods' Thursday close and is equal to 32 times the company's fiscal 2017 (ends in September) EPS consensus of $1.31, but is also well below Whole Foods' 2013 high of $62.37. Discounters, like Aldi, and other online grocers have made their way in, too.
Empire: The parent company of several grocery store chains offers online shopping with either delivery, in-store pickup or both at several IGA locations. Whole Foods shares surged 30 percent.
Whole Foods opened its first stand-alone restaurant, a Brazilian-style churrascaria, in its flagship Atlanta store earlier this spring. But if customers know that what they are getting is the same as what they'd get at the local store, they are more likely to try it out.
A person familiar with Amazon's strategy said the company believed customers wanted a combination of online and real-world buying options.
"This deal should leave no doubt that Amazon is deadly serious about dominating all aspects of retail", Paul Cuatrecasas, chief executive of Aquaa Partners, a London-based investment banking firm, said in an email.
The story is still developing, check back for the latest. Amazon has a lot to look forward to with these physical stores owned by them now. This deal would give Amazon a much bigger and stronger platform to reach food and beverage consumers. The U.S. grocery market is worth $750 billion annually and the average American family visits the grocery store twice a week.
The deal sent shockwaves across the food-distribution market, as Whole Foods' peers and supermarket chains grappled with the prospect of having to compete with Amazon's massive buying power and ability to sell goods at a lower cost.
"Amazon's strategy is to be the top grocery store for the coastal cities that are really Prime territory", Cooper said, referring to its shopper membership program.
Benchmark U.S. crude rose 28 cents to $44.74 a barrel in NY.
But Whole Foods has also alienated customers with high prices, with activist investors pushing for change.