Cincinnati-based grocery giant The Kroger Co. (KR) saw its shares tank 10% last week on news of ecommerce leader Amazon.com Inc.’s (AMZN) proposed $13.7 billion all-cash acquisition of high-end grocer Whole Foods Market Inc. (WFM). (See also: Is Kroger Stock a Buy After Falling Last Week?)

Despite the sell-off, Kroger Chief Executive Officer (CEO) Rodney McMullen spoke to CNBC on Tuesday with confidence regarding his company's ability to adapt and outperform in a rapidly changing industry. Many suggest Kroger should make a counteroffer for Whole Foods to protect its market share, but McMullen called the organic grocer a “good fit” for Amazon, indicating that he was not at all surprised by the blockbuster deal.

A $16B Organic Foods Segment

The number two U.S. grocer’s CEO says its business will continue like normal, as the firm remains hyperfocused on the long term, which he defined as three to five years. Kroger will continue to ramp up its efforts to transition into a more organic and natural foods focused retailer. McMullen hopes the health transformation will help the company grab a larger portion of the organic food market, as it sees sales in that segment boom to $16 billion.

“I think the retail industry is in constant change. We’ve been saying that for years,” said McMullen. “Amazon wanted to do something from the physical asset standpoint … We are trying to take care of customers.” The news comes just as German discount grocers Aldi and Lidl plan their U.S. strategy, pressuring prices which have already been heavily cut by Wal-Mart Stories Inc. (WMT).

Kroger shares gained 2.6% on the heels of McMullens’s interview to close at $23.35 on Wednesday. The day's gain trims KR stock loss year-to-date (YTD) at 32.3%. (See also: Kroger Nosedives on Downward Revised Guidance.)

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