M-007 - Groceries Market Study

Introduction

On 23 November 2022 we launched our market study into groceries. Our draft report was published for consultation on 6 June 2023 and we released our final report on 25 September 2023.

Findings

The study found there are no immediate competition issues for Jersey's grocery market. This was based on the following:

• Profits for grocery retailers are in line with expectations and benchmarks.
• Jersey's grocery market continues to evolve with new entrants, and development of online groceries.
• While Jersey has experienced food price inflation, it is in line with inflation elsewhere.
• Given market fundamentals, there are barriers to new entrants, in particular lower price operators.
• Price differences between Jersey and the UK tend to reflect higher on-island operating costs (primarily freight and labour) and tax differences, and not a lack of competition.

The study identified three recommendations for policy makers to further support the competitive process and consumers:

Recommendation 1

Improving price transparency with investment in Jersey Consumer Council's price comparison service, to encourage greater price based competition.

Recommendation 2

Maintain a competitive and dynamic groceries market, by minimising entry barriers, such as planning, and promoting Jersey as a test-bed for innovation.

Recommendation 3

Follow up recommendations from our market study into Freight Logistics, to increase competition and reduce freight costs.