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The price of pasta in Guernsey could go up by as much as 30% due to poor wheat crops, while coffee is also set for an above inflation price increase, a major Channel Islands retailer has warned.
Co-Op Chief Executive Officer Mark Cox said these two staples in particular were expected to rise in price because of supply chain issues, although more increases are expected because of a “perfect storm” of rising energy and fuel costs combined with the impact of Brexit and the pandemic.
In an interview for an Express podcast published today, Mr Cox said that the industry was braced for price increases, although supermarkets were doing all they could do mitigate the impact on customers, including investing in technology, reducing waste, expanding affordable ranges and discounting.
“We are seeing above inflation price increases on coffee - and pasta is also a particular issue at the moment,” he said. “That is a weather-related impact on the crop and we’re hearing stories that pasta will increase by roughly 30% because there is a shortage of that product.
“You’ve got those issues around crop failures, etc. that normally exist in the supply chain so it isn’t across the board. We are also seeing some price decreases and we’ve taken the decision to invest further in some prices to make sure we can hold a stable basket for customers.
“Across the spectrum, there will always be some products above inflation...and coffee and pasta are the two more noticeable ones that are coming through."
Overall, however, prices increases are expected. In the UK, where Guernsey and Jersey get most of their food, the cost of everyday items is rising at a faster rate than at any time in the last three decades and wages are failing to keep up.
Recently, Tesco chairman John Allan warned that “the worst is yet to come” on rising food prices, which could increase by as much as 5% by the spring.
Mr Cox said that the Channel Islands would not be immune from these international pressures.
“Our experience is, you’re seeing a lot of price changes coming through from suppliers,” he said. “You’re in this perfect storm of rising energy and petrol prices, together with the implications of Brexit and the pandemic, which have all had an impact on costs in the supply chain.”
Mr Cox said that he thought an era of low food prices was over, although consumers could still find well-priced products, such as the Co-op’s ‘honest value’ range.
He added that the customer-owned society was also working with food banks and the food-sharing app Olio to cut down on waste.
Mr Cox also called on Jersey's government to remove GST on everyday food items – a message which has equal resonance in Guernsey as the States continue to consider introducing GST to help plug a projected shortfall of £85million in its public finances, which is the subject of an Express Focus article published today.
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