A SUPERMARKET chain has hailed the recent drop in food inflation as a “glimmer of hope” for Islanders – but warned there were “looming challenges ahead” that could see some prices rise again.
Channel Island Coop chief executive Mark Cox said that anticipated hikes in the cost of oils, fats and cocoa were “likely to impact prices” in the months ahead.
But he also welcomed what he described as “a significant decline” in food inflation over the past quarter, noting that reductions were “making their way through the supply chain”.
The latest RPI data published by Statistics Jersey showed that the Island’s inflation rate fell to 5.7%, which was mostly driven by a cool-down in the housing sector.
The report noted that there had also been a drop in food inflation, which contributed slightly to the overall decrease.
Food prices increased less over the 12 months to March 2024 (up 3.7%) than they did over the same period to December 2023 (5.9%).
Mr Cox said: “While it’s unfortunate that food prices are still rising, the noteworthy aspect is that the rate of increase has considerably slowed down, offering a glimmer of hope.”
He continued: “On a more positive note, we’re beginning to observe cost price reductions making their way through the supply chain, which we’re passing on to consumers. Recognising the ongoing challenge of food pricing for many consumers, we’ve expanded the range of products featured in our price drop campaign and maintained our popular member discount weekends.”
A wide range of factors, including the war in Ukraine, climate change, labour shortages and supply-chain issues have contributed to the soaring costs of some staple products in recent years.
Mr Cox said that: “As a note of caution, there are a couple of looming challenges ahead, particularly with significant inflation expected in oils, fats, and cocoa which are likely to impact prices within these product groups.”
However, he said the supermarket remained “optimistic” that the “favourable trend” of cost price reductions would persist.
Separately, the UK’s Energy and Climate Intelligence Unit yesterday warned that the price of bread, biscuits and beer could be set to rise after one of the wettest winters on record reduced crops of wheat, barley and oats.
The group said that overall the crops could be 17% down on 2023, forcing some producers to import more from overseas, potentially increasing costs.
Carl Walker, who chairs the Jersey’s Consumer Council, said: “Hopefully retailers can do as much as they can to absorb as much of the increases as possible.”
He added: “We are not in the clear yet, but there are some early indications that we might be through the worst of it.”
A Waitrose spokesperson said: “While no retailer is immune to inflation, we’ve worked incredibly hard to keep prices low without compromising on quality, our industry-leading animal welfare standards and fair deals for farmers.
“For example, we’ve recently lowered the prices of hundreds of everyday grocery items including meat, fruit and vegetables and store-cupboard staples.”
