Dive Brief:

• Walmart is not planning to counter Amazon’s $13.7 billion bid for Whole Foods, according to an anonymous company source interviewed by Reuters.
• A Walmart spokesman declined to comment on the matter. An analyst told Reuters, meanwhile, the move wouldn’t make much sense, calling it “a 180-degree turn from what Walmart’s strategy has been for the past two to three years."
• Whole Foods’ stock continues to trade above the $42 per share offered by Amazon, indicating the market still believes a higher offer will come in. Potential bidders include Kroger, Costco and Target, according to Reuters.

Dive Insight:

The prospect of Walmart bidding for Whole Foods never made much sense. Although the world’s largest retailer has the capital and would love to make life more difficult for bitter rival Amazon, the natural and organic grocer would be a poor fit. It would also be a departure from Walmart’s recent winning strategy.

Over the past few years, Walmart’s focus has been primarily on investing in its 4,600 stores. This includes adding more fresh foods, improving lighting and shelving units, growing its online pick-up service and, of course, bringing down prices. The retailer has made acquisitions too, but these have mostly been relatively smaller companies that have helped beef up its e-commerce presence.

If Walmart were to pony up for Whole Foods, the deal would be worth as much as five times what the company paid for Jet.com, and as much as 50 times what it recently paid for apparel retailer Bonobos — and it wouldn’t improve the company’s online shopping reach. Whole Foods would instead saddle the store-rich retailer with more than 400 locations in need of some serious work.

The two companies aren’t a good fit culturally, either. While Walmart could probably help Whole Foods bring down prices and become a more efficient grocer, it would arguably struggle with the value-focused retailing that has made Whole Foods so popular with its diehard fans. Many “Whole Foodies,” in fact, shop at the natural and organic grocer because it is known as the anti-Walmart.

It’s important to note that Walmart has not issued a definitive “no” to a Whole Foods bid. But the move seems highly unlikely at this point.

So who else could make a counter offer? The remaining names don’t make much sense. Kroger, the top pick at this point, typically acquires much smaller retailers and is, like Walmart, focused on store investments right now. Costco doesn’t have the expertise or the need, while Target desperately needs to repair its own grocery operations before it could even consider buying a supermarket. The market and odds makers are betting a counter offer will come in, but looking at the options, a challenger to Amazon seems increasingly unlikely to emerge.