For market share the strategy makes total sense because they can afford to operate Whole Foods in the red. They might even be able to do it without sacrificing quality because they have AmazonFresh and AmazonNow.
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My view is that they are looking to increase all aspects of their brands. Whole Foods provides them with retail drop off points. Secondly, Amazon has some healthy food under private label which will go into Whole Foods. Thirdly, they will use the prime membership to discount prices in WF thus giving incentive for more prime membership. And finally, they will automate the heck out of WF.
Amazon did not spend $13B to get into the traditional grocery business.
buy low sell high...
organic food from china is invading the market