Items with strong brands, such as soda or snacks, typically have greater pricing power and less competition from private label products because of their distinct flavor or fan following. That gives their makers the ability to keep raising prices to mitigate higher costs, even as their volume drops.

On the other hand, customers are more likely to swap to a cheaper product or a store brand for items that don’t have a unique flavor or taste, such as a container of peanuts. That’s one reason why Kraft Heinz sold its Planters nuts business to Hormel three years ago.

“The more ingredients in the product, the more pricing power you have typically,” Sundaram said.

Retailers, including Target and Kroger, have rolled out new private brands to better compete with national brands and undercut them on price. Earlier this month, Target debuted Dealworthy, a brand made up of products including dental floss, paper towels and shampoo. Most of the new brand’s goods sell for under $10.

By stealing away sales, retailers can pressure national brands to lower an item’s price, introduce a cheaper version or offer a discount.

Some industry watchers expect a meaningful wave of price cuts as food makers struggle with weaker demand and lagging sales growth.

A number of food suppliers reported shrinking volume in North America in their latest quarters, including Kraft Heinz, Pringles maker Kellanova and PepsiCo’s food divisions. Volume excludes pricing and currency changes, giving investors a more accurate view of demand.

KeyBanc retail analyst Brad Thomas said those softer trends will force brands to cut their prices or give customers another reason to buy their product, such as offering a short-term promotion or innovative features.

“The ongoing ‘frenemy’ relationship between retailers and suppliers — where you push for lower prices — is part of the normal course of business,” he said. “What’s different about what’s happening now is how much volume the CPG [consumer packaged goods] brands are losing.”

He predicts that food-at-home prices will turn negative later this year. CFRA’s Sundaram echoed that prediction, while noting that costs need to keep falling, too.

Historically, food deflation happens about once a decade and lasts about eight months, according to Thomas. The last time was in 2016 and 2017, and Walmart was the biggest winner. Rival Target did not see the same benefit.

Even some of the biggest U.S. brands have signaled that consumers’ tolerance of higher prices has worn thin. Some companies have said they’re done hiking prices or pledged that the increases will be more modest this year.

For example, Kraft Heinz said on Feb. 14 that it expects its input costs will rise 3% this year; however, the Oscar Mayer owner is only planning to raise prices by 1%. The company is counting on productivity savings to make up the difference.

PepsiCo executives also said they expect to return to more “normalized” pricing in 2024. In the fourth quarter, Pepsi’s prices for its North American Frito-Lay business rose 5%, while those for its North American beverage unit climbed 9% compared with the year-ago period.

Still, Thomas acknowledged that brands with a strong following, such as Coca-Cola, will likely keep products pricier. Mid-tier brands are more vulnerable and will have to reduce their prices.

Just as inflation has become a dirty word, deflation can be one, too, said Greg Melich, a retail analyst for Evercore ISI.

“High inflation is bad, but deflation is bad, too, because you have fixed costs that aren’t going down,” he said.

Wage costs have risen as new minimum wage laws take effect and the labor market remains tight. Many food companies are locked into supplier contracts signed when commodities cost more.

Deflation can also cause concern that a company’s overall revenue may fall.

According to a KeyBanc estimate, a 1% drop in food prices would add $1 billion per month more to consumer spending, and lower-income households would benefit the most. But shoppers can choose to hang onto those savings instead of spending the extra cash.

For instance, Home Depot saw lumber prices drop over the past year, but it still has seen weaker demand for larger home projects amid higher interest rates. Best Buy sells consumer electronics, another deflationary category, but has struggled to drive more sales after the buying boom during the pandemic and as product innovation lags.

Melich said if customers spend less on necessities like food, they may buy more discretionary items, “but you can’t assume there’s a one to one transfer.”

Wall Street reflected those concerns in November when Walmart said deflation could be coming soon. Shares of the retail giant slid about 8%, their worst day in over a year at the time. (Walmart’s shares have been hovering near an all-time high).

Home Depot CFO Richard McPhail acknowledged the loaded meaning of deflation in a recent CNBC interview.

“I’m very careful with the word ‘deflation’ because of what it represents in people’s minds,” he said.

McPhail described prices as “settling” rather than declining. He said the home improvement retailer had not seen “significant movement in prices” since early August.

Even as Walmart scaled back widespread deflation predictions, its CFO Rainey said the discounter ultimately believes lower prices would be a good thing.

Walmart has seen deflation in general merchandise categories, even though food prices are still rising by low-single digits year-over-year.

“To be very clear, we want lower prices for our customers,” Rainey said.

— CNBC’s Christopher Hayes contributed to this report.