What happened

Shares of Sprouts Farmers Market Inc. (NASDAQ:SFM) declined 17.2% in the month of August, according to data provided by S&P Global Market Intelligence, after Amazon.com (NASDAQ:AMZN) completed its acquisition of Whole Foods Market.

Of course, Sprouts investors had known of the impending deal since June, when Amazon initially revealed its plans to buy Whole Foods for $13.7 billion. But the threat effectively escalated on Aug. 28, when Amazon closed on its purchase and wasted no time implementing drastic price reductions on dozens of Whole Foods' most popular products.

Sprouts Farmers Market produce department with neatly arranged fruits and vegetables

IMAGE SOURCE: SPROUTS FARMERS MARKET.

So what

Given Amazon CEO Jeff Bezos' mantra that "Your margin is my opportunity," it goes without saying that the move could impact traffic to Sprouts and its nearly 300 stores across the country.

That said -- and keeping in mind Amazon has promised "more to come" -- it may not be the immediate crushing blow that many investors fear. While The Wall Street Journal reported that more shoppers are indeed heading over to Whole Foods following the changes, many of those interviewed stated they didn't notice a significant drop in their overall grocery bills just yet.

Now what

For now, Sprouts investors will likely need to wait until the company's third-quarter report in early November for any fresh color on whether Amazon and Whole Foods are putting a dent in the business. In the meantime, it was no surprise to see Sprouts stock fall in response to last month's new developments.

John Mackey, CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.