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Survey Reveals Retailers Expect Euro Confusion and Cost Pressures  


       LONDON, October 2, 2001 -- Euro zone retailers believe consumers are unprepared for euro conversion, that spending levels are under threat and that their costs could rise by an average 5.3 percent according to retail technology company NCR, which today published the results of a survey* prepared for NCR by Gartner Consulting.  

        At a time of economic uncertainty, the research shows that retailers believe governments need to increase consumer education and take practical steps such as the earlier release of currency and the provision of financial assistance to help retailers tackle conversion and boost consumer confidence.

         The survey - conducted across the four main euro zone economies - Germany, France, Italy and Spain - found that 71 percent of retailers considered themselves prepared for conversion but that their plans tend to center on technology and staff training.  Far fewer retailers have plans to tackle cash shortages and counterfeit notes, which could cause disruption in stores for consumers. And only a minority plan store layout changes that will minimize queues and inconvenience for consumers.

         “While many retailers are planning to reassure consumers on price conversion, people will also need help to familarize themselves with the new currency and its worth in store,” said Alberto Camuri, vice president of NCR’s Retail Solutions Division for Europe, Middle East, Africa, South Asia and Pacific.

         “Retailers can take practical steps to build consumer confidence, such as combining help from staff with information from technology such as kiosks.  But such measures will only be successful if governments continue to make massive, concerted and focused efforts to tackle consumer awareness and concerns.”

         The enormous task of preparing consumers is illustrated by the survey’s findings that only 28 percent of retailers believe consumers are ready for conversion.  This concern is reinforced by a conflicting picture among retailers about the impact of conversion on consumer spending.

         In the lead up to E Day a country analysis of those surveyed reveals that half of all French retailers believe consumer spending will increase while 50 percent of those in Spain expect a decline.  The majority of German and Italian retailers expect spending to remain unchanged.  In the conversion period, 71 percent of French and 64 percent of Italian retailers expect a decline in spending.  Conversely, 58 percent of Spanish retailers anticipate a spending increase in this period, while 64 percent of German retailers see no change.

         These expected erratic spending patterns will be compounded by increased costs associated with euro conversion.  Some 54 percent of retailers believe that costs will increase by an average 5.3 percent.  Software and hardware technology are seen the most likely items to rise, but marketing and the cost of handling euro notes will also make an impact.  While 37 percent of those expecting a rise will absorb a cost increase, around 20 percent will increase prices to cope and another 20 percent don’t yet know how they will recoup costs.  

        “Given that the need for more action has been identified in the survey, retailers could expect their cost pressures to increase yet further”, said Silvo Lenart, vice president of Gartner Consulting.  Commenting on the survey he said, “These findings give a new sense of urgency to our previous recommendation that all retailers operating within the euro zone should conduct an immediate audit, particularly to re-assess vulnerability to in-store issues.”   

       With less than 100 days to conversion, the survey highlights vital assistance governments could provide to help ensure a smooth transition.  When asked what help is needed, around 80 percent of retailers want some form of tax break, reflecting the pressure on costs.  Some 77 percent want governments to increase consumer education and 75 percent want further clarity on the regulations covering the dispensing of dual currency during the conversion phase.  Around 65 percent believe that there should be earlier currency release to retailers.  This action would help with the cash handling logistics and also allow retailer staff to be more familiar with the new currency and less vulnerable to counterfeits.

About the survey
        Commissioned by NCR Corporation, Gartner Consulting conducted extensive primary research and analysis during August and September of 2001 through a programme of telephone interviews with the managers responsible for euro conversion in retailers across five EU countries, France, Germany, Italy, Spain and the United Kingdom. These retailers ranged across small, medium and large size sized enterprises and vertical sectors. The final sample included responses from France (42), Germany (39), Italy (39), Spain (36) and the United Kingdom (58). The total study comprised 214 respondents, representative of all retailers in the five countries, giving a margin of error of +/- 5.6% at 90% confidence. A summary version of Gartner’s white paper containing the survey results may be found at www.ncr.com. *Gartner Consulting results may differ from Gartner Research results.

About NCR Corporation  
        NCR Corporation
  (NYSE: NCR) is a leader in providing Relationship Technology solutions to customers worldwide.  NCR’s Relationship Technology solutions include the Teradata database and analytical applications such as customer relationship management (CRM) and demand chain management, store automation systems and automated teller machines (ATMs). The company’s business solutions are built on the foundation of its long-established industry knowledge and consulting expertise, value-adding software, global customer support services, a complete line of consumable and media products, and leading edge hardware technology.  NCR employs 33,300 in more than 100 countries, and is a component stock of the Standard & Poor’s 500 Index.  More information about NCR and its solutions may be found at www.ncr.com.

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