Rather, Amazon wanted a high-end grocery chain with convenient parking to provide a more attractive locale for foot traffic to pick up orders.
In addition, Whole Foods has a strong brand and above-average income clientele willing to pay a premium for groceries - and perhaps much else.
Wiesel, the analyst, said Amazon has been trying to crack the grocery code for years with only varied success. Are they exaggerating? What are the possible consequences for traditional food retailers? You can not succeed with a "pure play" online model. That means ad/product placements in supermarkets, on bags, and everywhere else inside and outside of the stores.
"They (Amazon) already have our gift boxes". Whole Foods may be a niche player, it still generates a 15.7 billion euro turnover with 431 stores in the USA, thirteen in Canada and nine in the United Kingdom. Then, Amazon announced the $13.7 billion investment in Whole Foods. This may partially solve its costly "last mile", even beyond its food sales.
Should we be concerned that Amazon will have a monopoly on the economy along with Google and Apple? And if Amazon starts leasing locations, those owners are going to enjoy the stability that comes with having Amazon as a tenant.
When the Justice Department sued Microsoft Corp (MSFT.O) in 1998 the lawsuit was aimed at stopping it from using its dominance of the operating system market to also dominate browser software. Its Amazon Elements baby wipes, introduced in 2014, have managed to capture 16% of online market share, despite being available only to Prime members. Wilke also noted that Mackey would continue as CEO of Whole Foods, which prompted Mackey to interject by continuing the romantic allusion. In that sense, the acquisition is very similar to its previous purchases, like diapers.com and soap.com (household and care products).
Prepared foods are another way grocers are increasingly making their stores a destination. Whole Foods, meanwhile, could help Amazon grow its decade-long grocery effort, exposing it to more markets and providing a nationwide physical presence. Amazon now has a fresh laboratory to test its tech innovations and do so at scale. It has an overabundance in funds. Similarly, Whole Foods acts as a curator for shoppers by banning ingredients like saccharin and bleached flour from the products it sells.
While running for president last May, Trump told Fox News that Amazon CEO Jeff Bezos was concerned Trump would target Amazon, which Trump said has "a huge antitrust problem" but didn't get into specifics. Remember the company's original disruption: bookselling. Too many players compete on the field, which leaves little room for progress. People heard this news, it surprised them, and they reacted emotionally.
With Whole Foods, Amazon gets an established business that it can transform through its technology and supply network expertise.
One thing, though, should be made clear: Amazon is positioning itself to be the most powerful retailer in the world, and it can not achieve this goal without food.
The deal could be "transformative", Moody's lead retail analyst Charlie O'Shea said, "not just for food retail, but for retail in general".
USA firms are now looking to play catch up - key as bricks-and-mortar stores are hit by a slowdown and online players battle with tight profit margins and high delivery costs.
Groceries are already a fiercely competitive business, with low-priced rivals like Aldi putting pressure on traditional supermarket chains and another discounter, Lidl, opening its first USA stores just this week. At first glance, the consequences will play out in the United States.
Separately, Amazon has been testing no-checkout technology at a convenience store in Seattle. 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.
According to a note written to clients by Deutsche Bank Analyst Paul Trussell, and obtained by CNBC, the Whole Foods Market acquisition "represents a game-changer with Costco's competitive moat in grocery under greater threat while its digital platform lags peers, putting membership renewal at risk for decline".
Investors are grossly overestimating the impact to Walmart of Amazon's bid for Whole Foods, according to Moody's. But internet-wise, no one expects even Walmart to catch up with Amazon anytime soon, or for that virtual road to be smooth. In short, there are plenty of reasons to become nervous.