Ocado shares have jumped after Friday's Amazon Wholefoods shocker

Emma Haslett
Follow Emma
A Tesco  plastic bag blows in the wind o
Investors are speculating about Ocado now

Shares in Ocado leapt this morning as investors began to speculate following Amazon's $13.7bn (£10.7bn) takeover of upmarket US grocer Whole Foods on Friday.

Shares in the grocer rose 8.23 per cent to 298.5p in early trading, as investors hoped Ocado may be Amazon's next target.

Meanwhile, shares in UK-listed supermarkets were in recovery this morning after they experienced heavy falls on Friday following the announcement of the deal.

Having dropped 4.92 per cent on Friday, Tesco's share price rose 0.85 per cent to 172.5p, while Sainsbury's, which closed 3.85 per cent lower last week, rose 0.9 per cent to 254.5p.

Marks & Spencer, which fell 1.88 per cent on Friday, rose 1.91 per cent today, to 351.75p.

Read more: Holy guacamole: Amazon is buying Whole Foods for $13.7bn

Amazon's decision to buy Whole Foods took the sector by surprise, sending investors into a panic over the tech giant's move into the grocery sector.

In 2007, the company unveiled Amazon Fresh, its grocery delivery service, which launched in the UK in 2015, causing speculation it was planning to take on the likes of Ocado.

However, this morning analysts were sanguine about the medium-term effects of Friday's deal.

"It is not clear how a physical store base of only nine units in the UK will help Whole Foods in the short-term to catapault Amazon Fresh up the Online grocery rankings, so the negative stockmarket reaction to the news on Friday looks a bit overdone, even if in the long-term the writing is on the wall," pointed out retail analyst Nick Bubb.

However, the deal is also a sign UK supermarkets are becoming increasingly embattled.

"If we thought the supermarkets in the UK had trouble with the emergence of the German discounters, it is as nothing compared to the ramifications of Amazon’s expansion into grocery," said Chris Beauchamp, chief market analyst at IG, on Friday.

Read more: Here are the 13 funniest tweets about Amazon's Whole Foods takeover

Related articles