EURO BRIEF

Shopping and changing


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 WHEN the euro takes solid form, on January 1st 2002, shops will be in the front line, sucking in old coins and notes and pumping new currency out into the pockets of consumers. Equipping themselves to do so will be expensive. Eurocommerce, a lobby group for European retailers, reckons that gearing up for the euro will cost shopkeepers 1.8% of turnover—some $24 billion across the whole EU. Marks and Spencer, a British retailer that owns stores in six of the 11 euro countries and has franchises in a further four, will spend $180m installing new tills—secure against the millennium bug as well as euro-ready.

Part of the expense will come from shops carrying larger floats of cash than usual, so as to give change only in euros, while taking in old and new currencies. To be ready for this, shops will have to take delivery of unusually large quantities of new coins and notes in December 2001, during the busy Christmas shopping season. This will mean extra security, costly at a time when temporary staff numbers are at their peak. For similar reasons, Britain’s change to decimal currency in 1971 was made on February 15th, one of the slowest times of year for retailers; but EU ministers rejected this idea for the euro.

Pricing policy will be another hot potato. During the transition, and probably for some time afterwards, shops will have to display two prices, one in euros and one in local currency. That could be confusing for staff and shoppers alike. Price transparency between countries, once the mask of currency conversion is removed, may also be an issue, though some firms claim to be untroubled. McDonald’s points out that a Venetian Big Mac already goes for more lire than a Milanese one, without any loss of sales in the Rialto.

Regardless of how much the fizzy drinks and lollies inside them go for, Europe’s 3.2m-odd vending machines will need new coin slots and recalibration of the scales, scanners and ammeters with which they check money. Jean-Louis Bariller of the French vending-machine association reckons that the cost per machine will range from FFr3,000 ($540) for the oldest, with mechanical brains, to FFr500 for the most modern, in which adjustment is simply a matter of reprogramming an internal computer. Similar adjustments will be needed for parking meters, cash dispensers, postal-franking machines and pay phones. Whenever it arrives, e-day promises to be a nightmare for shopkeepers—and probably for shoppers too.