Most of the major multiples have discounted the potatoes throughout the short season, with prices as low as £1/kg in some stores. In some cases they have been cheaper than standard and own label.
"Jersey Royals have been promoted very heavily," said one supermarket source. "There's lots of competition between retailers and there's not a lot of money in it at all. Everyone's rushing around like busy fools and not making any money."
The obsession with being seen to offer customers the best prices was damaging margins, he claimed.
Recession had prompted supermarkets to try to "save the world" by offering premium products at low prices, added a senior potato industry figure. "But Jersey Royals is an iconic brand with value to it. It's not food for the masses anyway. Not everyone can afford to eat Jersey Royals."
The potatoes were being devalued as a brand by price promotions throughout the season, said another source.
There was a danger shoppers would come to believe £1/kg to £1.49/kg was the standard price for the crop, he warned.
Downward price pressure had severely damaged returns at both ends of the supply chain, he claimed. "It was always going to be a competitive season because of the marketplace. "
Supermarkets have competed hard to be the first to stock Jersey Royals and have widely publicised the April to July season.
"There's huge kudos about having Jersey Royals in early," said the source. "It's a real benchmark and it's one-upmanship."
Growers on the island have invested millions of pounds this year in improving facilities to ensure potatoes can be packed at source, reducing the practice of shipping produce to the UK to be packed.