Jeff Bezos just made Michael Medline’s life a whole lot more difficult.

Bezos’s US$13.7-billion all-cash offer for Whole Foods Market (WFM.O) on June 16 hammered Canadian grocery stocks, as fears Amazon.com’s (AMZN.O) foray into the grocery aisles will be another headwind for an already challenged industry.

Shares of Empire Co. (EMPa.TO) were hit alongside fellow Canadian heavyweights Loblaw (L.TO) and Metro (MRU.TO) after Bezos announced plans to pick up the niche U.S. grocer. While Whole Foods only has 13 stores in Canada, Amazon’s history of aggressive pricing and a winner-take-all approach to gaining market share has ignited fears he may choose to take the battle for grocery baskets to the front stoop of all established players in the North American market.

Of particular concern for Medline is that his Sobeys banner, owned by parent company Empire Co., simply doesn’t need another headache as it tries to turn around what has become a disastrous acquisition of Safeway Canada. The $5.8-billion takeover announced in June of 2013 has proved a boondoggle for the Nova Scotia-based grocer, prompting a $2.9-billion writedown last year and costing former CEO Marc Poulin his job.

The company has been marred by integration problems ranging from consumers rejecting an overhaul of the house label brands to the marriage of product tracking software. A spate of food deflation stemming from intense competition in the space, in which Wal-Mart (WMT.N) has taken a slash and burn approach to pricing, also hasn't done Medline any favours. Indeed, Statistics Canada reported on Friday that prices paid at Canadian grocery stores fell 1.2 per cent year-over-year in May.

Empire appointed Medline to the top job in January, tasking him with the company's turnaround after his ouster from Canadian Tire (CTCa.TO). There was an early reminder of the task at hand three months after he joined: same-store sales slumped 3.1 per cent in the company's fiscal third quarter, while adjusted profit sank almost 48 per cent. Empire will report fourth-quarter results on Wednesday.

In response to the challenges, Medline has launched what Empire dubs “Project Sunrise” – a plan to find a half-billion dollars’ worth of annualized savings and grow the company’s top and bottom lines. Medline hopes that the effort to consolidate Empire’s regional units into one nationally-led structure will simplify how the company negotiates with vendors and result in cost savings.

While Whole Foods has limited reach within Canada, at least one analyst thinks Empire will feel the brunt of the acquisition’s impact in the west. Desjardins Securities’ Keith Howlett, who does not cover Empire but does have recommendations on competitors Loblaw and Metro, said Vancouver could be the first battleground between the Canadian grocers and Amazon.

“The potential competitive impact in Vancouver would be primarily on Empire, given Safeway is the leading conventional grocer in the market,” Howlett wrote in a June 19 research note.

Howlett thinks that if anything, Amazon’s move will force the incumbents into accelerating their digital strategy.

“In Toronto, Loblaw, Metro, Empire, Pusateri’s, McEwan and Longo’s might all be affected to some extent by the launch of PrimeFresh and availability of PrimeNow,” he wrote. “We expect all the public grocers will modestly accelerate the ongoing rollout of click-and-collect and delivery to home. They also may introduce trial delivery of prepared meals in select urban test markets using third-party delivery services.”