SandpiperCI – which today opened the first of its 16 planned Morrisons stores – has pledged to help lower costs for consumers with prices in the new stores at least five per cent lower than the Foodhalls they are replacing.
Chief executive Tony O’Neill also repeated calls for the top level of the new retail tax to be halved and said he would support the removal of GST from food.
Mr O’Neill, whose company runs Marks & Spencer, Iceland and from today the Morrisons franchises in the Island, said freight costs, high rents and higher staff wages all contributed to Jersey prices outstripping those charged in the UK.
And he said the new 20 per cent retail tax agreed by the States had already led to SandpiperCI halting developments and investments in the retail sector to cover the increase in costs that the tax would create.
He added: ‘We have always said that we didn’t think it appropriate that GST is charged on food.
‘We can understand the approach of taking a flat line across everything for simplicity but clearly other regulators don’t do that. In the UK, VAT is not taxed on food.’
The first Morrisons Daily store was due to open this morning in St Ouen with around one Foodhall due to be converted every week. The company entered into agreement with Morrisons after the UK Co-op bought Nisa, which supplies the Foodhalls.
Mr O’Neill said: ‘Morrisons’ substantial buying power means we will be able to lower our current Foodhall prices by at least five per cent on an average shopping basket and significantly more on many of Morrisons’ own-label products.’
He added that current discussions with politicians had been more focused on halving the top level of the retail tax rather than GST proposals but that he would support any move to take the tax off food items.
His comments come just a day after Alliance announced it would be reducing the cost of hundreds of Tesco products to UK prices.
Its managing director, Andrew Bagot, called for a fresh debate on removing GST from food and said he hoped to start a wider debate about food pricing in the Channel Islands. The Jersey Consumer Council also said it would support action that led to a long-term reduction in the price of the weekly supermarket shop for Jersey consumers.
The Co-op, meanwhile, has said it is following the comments of its competitors closely and had followed its UK counterpart’s policy of reducing prices nationally earlier this year.
GST was first introduced in the Island in 2008 at a rate of three per cent before it was upped two years later to five per cent.
The chief executive of the Channel Islands Co-operative Society, Colin Macleod, said: ‘The society followed the UK Co-operative’s lead on reducing prices where possible earlier this year and, of course, hundreds of our products already carry the same price structure as the UK as they are price marked at source. We are interested by the comments from Alliance and Morrisons regarding the price bands from the UK that they are looking to import.
‘Pricing remains a key issue, especially with the recent upward cost price pressure from suppliers following the Brexit referendum and an increased cost of living. That said, this follows a period of relative stability in food pricing and could be considered a market adjustment.’
