European retail organisations have a low level of preparedness for the euro changeover, a recent survey has found. Cap Gemini Ernst & Young and the Association for the Monetary Union of Europe (AMUE) commissioned the survey, and 1,000 large businesses were interviewed.

The survey reveals that there is a risk that organisations are underestimating the time required for the transformation to the euro.

There is confusion about the date by which the transition to the euro must be complete. Some 30 per cent of the retailers surveyed believed that the official transition plan would be amended.

Only about half of the large retailers surveyed had been approached by their suppliers or customers to conduct business in euros. Other problems include low levels of internal commitment and interest, despite the attention the euro receives at board level.

A quarter of the businesses across Europe think they can keep internal accounts and book-keeping in their national currency units after January 1st, 2002.

This is despite announcements by several countries that there will be penalties for not keeping internal accounts and records for taxation purposes in euros in 2002.

Slightly more than two-thirds of the retailers surveyed who deal with credit cards intended to accept payment in the national currency after January 1st, 2002.

Cap Gemini Ernst & Young and AMUE state that this demonstrates that most businesses seem unaware that the national currencies will cease to exist as legal tender on 31st December, 2001, unless the payments are made in cash.

There will be a six-week dual circulation period following that in the Republic, and Irish cash will cease to be legal tender on February 9th.

Only 8 per cent of retailers dealing with cash transactions said they were ready for the introduction of the new notes and coins. Nearly one-third of them had not addressed the notes and coins issue at all.

The survey concludes that since retail is the pivotal industry for the euro, retailers need to prepare early to fulfil their customers' needs or it will cost them dearly.

"It is vital to involve the entire supply chain and staff in the euro changeover project to generate a snowball effect inside and outside the company," it says.