Amazon's shock deal to acquire upscale US grocery retailer Whole Foods for $US13.7 billion ($18 billion) signals its growing intent to dominate groceries, and raises risks for Australian retailers ahead of its local launch, shareholders and analysts say.

Jeff Bezos' $US462 billion e-commerce juggernaut surprised the retail and technology industries on Friday (US time) when it announced an agreement to buy Whole Foods, a grocery chain operating mainly in upmarket areas, which has been struggling and under pressure from activist shareholders.