The retail sector is at the end of the business chain in terms of dealing with the Euro in its cash form, as euro notes and coins do not hit the streets until 1st January, 2002 (Eday). That does not mean that retailers can sit on their hands and do nothing for a year or two. On the contrary, it is the retail sector that is at the forefront of introducing the euro to the consumer.

This places an added burden on the retailer over and above the conversion of business systems to deal with the euro. It is only when the consumer spends the euro in the shops that he or she will be confronted with the real problems of a loss of a familiar reference.

From childhood people know almost instinctively the value of a pound or 10 pounds or a 100 pounds; consumers will not instinctively know how much one euro or 10 euros or 100 euros is worth. Retailers, too, must plan for the customer who may present them with a euro cheque from January 1999 onwards.

That is why the retail sector has a very special role to play in informing the consumer, maintaining customer confidence and coping with the period of dual circulation of both Irish pounds and euros. To this end, the larger retailers and retail associations are already heavily involved in planning for the euro and are engaged in discussions with the banking sector and government.

Shops have not been helped in their task by the decision (made in Europe not Ireland) to introduce the new currency on 1st January, 2002. Crucial to the smooth introduction of notes and coins will be clear pricing and very well trained staff. However, the introduction of notes and coins comes immediately after the Christmas period, coincides with the very heavy trading period of the January sales when there is heavy price discounting.

This will make staff training in December impossible and the sales prices will add to the confusion of new euro prices. The European Commission allows for a period of six months after Eday for the dual circulation of both Irish notes and coins and euro notes and coins. However, retailers, the banks and the authorities believe that Irish pounds could be withdrawn from the system much more quickly and all parties are working to shorten this period of confusion.

Within the Food, Drink and Tobacco Federation of IBEC grocery suppliers and retailers have been working on a code of practice with the Director of Consumer Affairs which covers an agreed timetable for the conversion to euros, invoicing, dual display of prices and consumer information.

Retailers and suppliers have decided to change over their business to business activities a year before E-day. The code of practice was launched last weekend. IBEC along with Forfas, the Director of Consumer Affairs and other retail groups are working to establish a similar code of practice for other areas of the retail trade. Retailers are working out how they will impart information to consumers. They will use leaflets and posters to inform the public of what will happen and many shops will dual display prices for some time before and for a short time after the introduction of euro notes and coins.

From 1 January 2002 every retail outlet must have converted to pricing and charging in euros, even though many customers will still be paying in Irish pounds. Retailers will convert the Irish pounds they receive from customers to euros and will give back change in euros.

Retailers with relatively new electronic cash registers will be able to adapt their tills to calculate the conversion from Irish pounds to euros; those who do not have modern cash registers will be able to use one-function calculators that will convert monetary amounts from Irish pounds to euros. They will not have to buy expensive new equipment just to cater for the short period of dual circulation.

Retailers will have to decide how and when they will dual display prices in Irish pounds and euros. There is unlikely to be any obligation to dual display prices but most retailers agree that it will be a crucial part of consumer information and maintaining consumer confidence. Retailers will also have to decide when to move to euro price points - charging for items in rounds euro figures - and some will move to euro price points a short before Eday which will result in inconvenient Irish pound prices.

Retailers will have to work out how much euro cash they and in what denominations will require in the first few days after E-day. Estimates suggest that the till float will have to be increased by a factor of between five and 10 for a short period, because the tills will not be replenished by customers who will tender Irish pounds and be given change in euros.

All these issues and more are dealt with in the Euro Preparation Guide for Retailers which has been published by IBEC in collaboration with the Association for the Monetary Union of Europe.

David Croughan is chief economist and EMU project director at IBEC.