FOOD prices in Jersey are around a third higher than they were five years ago and could be “on course to breach the 40% mark” if UK grocery costs reach projected levels later this year, according to a trade association.
Harvir Dhillon, an economist at the British Retail Consortium, made the comments after analysis released by the Energy and Climate Intelligence Unit indicated that UK food prices are on track to be 50% higher by November than they were at the start of the cost-of-living crisis in mid-2021.
The ECIU cited “a combination of extreme weather driven by climate change, global supply disruptions, and continued exposure to volatile oil and gas markets”.
Chris Jaccarini, a food and farming analyst at the research body, said: “Trump’s war in the Middle East is set to drive shopping bills higher as oil and gas prices spike.”
He continued: “Scientists are predicting 2027 to be the hottest year on record with climate change combining with the El Nino effect kicking off this year. Three of England’s worst harvests on record have been in the past five years.
“Unless we get to net zero emissions to stop climate change and bring balance to the system, food prices will spiral ever further, but net zero also means burning less oil and gas, so insulating our food system from the kind of price spikes we’ve been seeing since Russian invaded Ukraine.”
Data released by Statistics Jersey last month outlines how average prices across certain products have increased in the Island over the past five years.
Some of the categories that have seen the biggest changes include beef (60.8%), lamb (52.7%), coffee and cocoa (51.5%) and oils and fats (50.6%).
Mr Dhillon said: “Jersey households have not been immune to the food price pressures felt across the UK over the past five years.
“Food prices on the Island are around 33% higher than they were in mid-2021, compared to roughly 39% in the UK over the same period.
“While Jersey has tracked broadly below the UK throughout this period, the gap has been relatively modest.”
Looking ahead, Mr Dhillon added that “further pressure is likely”.
“If UK food prices reach the 50% cumulative rise projected by the ECIU by late 2026, Jersey is on course to breach the 40% mark, meaning Island shoppers would be paying around £1.40 for every £1 of food they bought in mid-2021.”
Mr Dhillon noted that the Island’s reliance on nuclear-powered electricity from France, rather than the UK grid – which remains “more exposed” to global gas price volatility – should provide “some insulation from the energy cost pass-through affecting UK food producers and retailers”.
But he also warned that “the Island is not entirely shielded”.
“Supply chains, shipping costs, and the broader global commodity environment all mean that Middle East-driven volatility will still be felt, albeit likely to a lesser degree than on the mainland.”
Channel Islands Coop chief executive Mark Cox said that cost price inflation “has been a real challenge for food retailers over the past five years”.
He continued: “It has come from all directions, whether that’s the impact of Covid, the conflict in Ukraine, tensions in the Middle East, or Brexit. On top of that, increases in the national living wage and national insurance have all added further pressure into the cost of producing, moving and selling food.”
Mr Cox added that it was important to recognise these pressures were facing both the UK and Jersey, with “global and national issues feeding through into all markets”.
He also noted that the Coop had “made a conscious decision to absorb as much of these increases as we can, while still making sure the business remains sustainable for the long term”.
“At the same time, we are not immune. The same pressures affecting UK supply chains, things like fuel, shipping and raw material costs, all play through here in the Islands as well.
“Jersey does benefit from a degree of insulation in areas like energy, but we are still part of a global supply chain.”
