Amazon already offers a home delivery service for groceries in certain markets. Kroger, which was rumored to be considering takeover of Whole Foods as well a year ago, was down 9%.
The $42 a share offer from Amazon is a 27 percent premium over Whole Foods closing stock price on Thursday.
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Analysts owed the slump to profit booking ahead of a longer weekend as the market will stay closed on Monday on occasion of Eid. Meanwhile, the broad based NSE Nifty fell by 55.05 or 0.57% at 9,574.95 with 38 components registering drop.
Wal-Mart Stores Inc said on Friday it would buy online men's fashion retailer Bonobos Inc for $310 million, in its fourth e-commerce deal in under a year, as it seeks to bridge the gap with e-commerce leader Amazon.com Inc.
Online delivery of groceries so far has been tough for any company to pull off because of customers' concerns about the quality of meat and produce, Wedbush Securities analyst Michael Pachter said.
Whole Foods wove its way into the crowded and competitive Dayton grocers market in 2015, with its first Dayton-area store, in Washington Twp.at 1050 Miamisburg-Centerville Road. It is made out to be an Amazon rival with its market size and current valuation of $3.4 billion.
Purchase sets the stage for "transformative" retail experiments that could revolutionise how people buy groceries.
"It's amusing. I was just ordering something on Amazon", said Nick Yezierski, a hotel manager who was eating breakfast outside the Whole Foods flagship store in Austin, Texas.
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Meanwhile, Whole Foods stock soared on the news, jumping almost 30 percent by mid-morning. And it should be able to bring cost-cutting technologies, such as robots to move inventory around, while the company gets a better picture of customers by marrying data from Amazon and Whole Foods' loyalty programs.
For now, though, Whole Foods cashiers and other employees can take a sigh of relief. At some of the Whole Foods 365 locations, the grocer's discounted brand, consumers can use iPads to order food or find a bottle of wine. Amazon, on the other hand, saw an increase in its share value of around 2.4 percent with around $11 billion adding to its market capitalization. Walmart is very much taking on Amazon and utilising its network to develop ecommerce and click & collect at its thousands of stores.
West Hartford resident Nancy Kennedy, 88, who stopped by the Whole Foods store to shop, said she does not go online because she's not familiar with digital technology.
Grocery stores are under more pressure to compete based on convenience, especially as more retailers and startups introduce food options such as meal kits, low-priced snacks and organic groceries, according to a report released earlier this year by Jones Lang LaSalle, a commercial real estate firm.
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