EUROPEAN Union retailers could face extraordinary costs of more than 27 billion ECUs (£21 billion) - almost 2 per cent of their total annual turnover - in adapting their operations to the introduction of the euro, according to a private industry research report.

The figure, equivalent to about $100 per person in the EU, provides the first concrete estimate outside the banking sector of the costs European monetary union will force companies to bear. The estimate is likely to fuel concern about the impact of the single currency project on businesses and consumers.

Leading retailers point out that margins will be squeezed or inflation will be pushed up. The research report by EuroCommerce, the EU retailing body, warns: "It would be politically difficult to sell the euro to citizens if, as a result, prices would increase."