Kroger plunges after earnings. Time to buy on weakness?

Shares in Kroger (KR) have tumbled more than 15% since the supermarket giant said Tuesday its third-quarter earnings missed Wall Street's forecast by massive 10 cents a share, prompting the company to cut its outlook.

How can Kroger, a company that should be benefiting from cash-strapped consumers eating more meals at home, be faring so poorly? Price deflation. Yes, traffic to grocery stores is up, but frugal shoppers are increasingly going for stuff that's on sale (which hurts margins). And, of course, there's intense price competition from Wal-Mart (WMT), Supervalu (SVU) and Safeway (SWY). The result was a lousy quarter, with more headwinds to come.