There is no doubt that the introduction of the euro will impose significant costs on retailers. Early planning can successfully reduce these costs. Indirect costs such as margin erosion and loss of market share are often overlooked in EMU projects. Whilst EMU codes of practice have provided a degree of certainty, significant uncertainty remains particularly in relation to consumer behaviour and competitor activity. As discussed earlier, the costs of euro-conversion will be significant for retailers.
Retailers are likely to look to suppliers to share the costs of euro conversion.
The negotiation of margins during the transition period will be a test of wills on both sides of the table. As retailers focus on costs and margin protection, pressure for greater efficiency in the value chain will increase. Centralised distribution is also likely to increase as greater efficiency is sought. Changes in sourcing policy may occur. Price transparency will increase the likelihood of alternative sourcing for retailers.