Supermarkets such as Kroger are facing a pickup in food deflation, which is hurting top-line growth and igniting what Credit Suisse this week termed a "grocery price war."
"One big issue with deflation is with lower prices it breeds more competition because you're trying to win traffic and you're being more promotional doing that," Wells Fargo analyst Zachary Fadem said in an interview.
There have been price wars in the supermarket sector before and history has shown it can decimate margins and profitability as chains attempt to increase market share at all costs.
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