A lot of islands are expensive but here it is pronounced. Western "shopping mall" goods are not bought by many people in the core population, so the market consists mainly of low-elasticity demanders, namely tourists and wealthy expats. A small number of buyers have to cover the fixed costs of transportation to the island plus the costs of a not-so-efficient retail sector. Taxi fares are cartelized plus it's only locals on the informal buses, so even intra-city transport costs are high. That means lots of local monopoly and yet higher prices. To go from a typical tourist hotel to some semi-cheap local food isn't easy to do, and so it is possible to spend $30 or more on a mediocre breakfast and yes the portions are small too.
In turn that keeps away tourists and maintains the need to spread fixed costs across a small rather than a large number of buyers. Chicken, egg, etc.
There is good cheap food in the countryside, especially if you catch a jamboree or fish fry.
Addendum: They also use the East Caribbean Dollar, which perhaps for them is not an optimum currency area. Should Grenada be pegging to the U.S. dollar?