Euromonitor Analyst Michelle Grant said Amazon.com (AMZN) - Get Report has the potential to take down huge retail competitor Walmart (WMT) - Get Report with its newly acquired Whole Foods (WFM) "Whole Foods 365" brand, CNBC reported.
Whole Foods 365 is the cheaper, more value-conscious cousin of Whole Foods. Amazon has the financial and tactical capability to grow the Whole Foods 365 brand into a major competitor for Walmart by targeting younger and more frugal consumers, Grant said.
Walmart is "playing offense," though, e-commerce head Marc Lore said. The company has already lowered prices and started some curbside pickup to compete with Amazon's expected plans to lower Whole Foods prices.
Groceries comprise 56% of Walmart's revenue, meaning a hit in the grocery aisle could signal trouble down the road.
Amazon's shares rose 0.6% to $994 at Monday's close. Whole Foods' rose 1.3% to $43.23, and Walmart's stock was up 0.3% to $75.48.
What's Hot On the TheStreet
All eyes on Apple this week: Apple's (AAPL) - Get Report stock will be on the minds of Wall Street bit more than the norm this week. Shares of the tech giant have fallen 6.9% since the Nasdaq's peak on June 8 amid a broader selloff in tech. Not helping near-term sentiment on the company are two rare analyst downgrades that have questioned how big a seller the iPhone 8 will be.
But investors shouldn't be ready to throw in the towel on Apple by any stretch of the imagination.
"When you have these sellers come in, all you have to do is wait them out -- and one of the things I learned as a hedge fund manager is that patience is a true virtue," TheStreet's founder Jim Cramer, who also manages the Action Alerts PLUS charitable trust portfolio, said on Apple's recent slide.
After the deal was announced on Friday, U.S. Rep. Ro Khanna (D-Calif.) urged the U.S. Department of Justice to conduct a review on the merger's legality and possible harm to the economy.
"I am concerned about what this deal means for suppliers and neighborhood grocery stores," Khanna said in a statement. "The Justice Department and FTC must undertake a review that considers not just the merger's impact on prices, but also the impact on jobs and wages. We need to reorient antitrust policy to factor in the harm that economic concentration causes for American workers."
Meanwhile, Whole Foods shares are trading above Amazon's offer price as to suggest a bidding war may ensue.
Don't miss these top stories from TheStreet:
- Apple's Stock Rips Higher and These 5 Things Hint the Run May Not Die Anytime Soon
- Intel Just Got Smoked By AMD In the Race to Unleash a Super Chip
- Alibaba Is a Beast -- Here's Where the Stock Is Headed Next
- One Analyst Just Explained What 650 Million People Using iPhones Means to Apple