Margins Squeezed as Deflation Subsides

Food retailers have been waiting for inflation to make a comeback, but some say it may be awhile before cost increases can be fully passed along to consumers. Some operators that are in the midst of price-reduction initiatives, including Pleasanton, Calif.-based Safeway and Food Lion parent Delhaize Group, said they will sacrifice some margin in the short term, and analysts said it could take a few

Food retailers have been waiting for inflation to make a comeback, but some say it may be awhile before cost increases can be fully passed along to consumers.

Some operators that are in the midst of price-reduction initiatives, including Pleasanton, Calif.-based Safeway and Food Lion parent Delhaize Group, said they will sacrifice some margin in the short term, and analysts said it could take a few quarters for retailers to adjust shelf prices.

Pricing in the last few years ha

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