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Thursday, 6 December, 2001, 10:04 GMT
Baker's euro challenge
Wieden Germany
The euro will be rolled out by small shops and market traders
by BBC News Online's Tim Weber

If the launch of the euro as a cash currency is a success, it will be down to people like Stefan Brunner.

He manages his family's bakery and fast-growing chain of shops in and around the small city of Weiden, in the north east of Bavaria.

With 78 shops and just over 400 staff, Stefan Brunner faces a huge - and expensive task.

Stefan Brunner is facing large costs for his bakery business
Stefan Brunner is facing large costs for his bakery business
Europe's shop keepers will move coins weighing five times as much as the Titanic, and Stefan Brunner predicts that shops like his will be the "euro money changers of Germany".

Customers will pay with Deutschmarks, and retailers are obliged to give change in euro notes and coins.

At the branches of the Brunner Bäckerei, shop assistants serve about 750,000 customers a month. Each customer spends on average DM4.50 (2.30 euros) per transaction. That means a lot of cash, and a lot of change that needs to be distributed.

Getting euro ready

The launch of the euro is having an impact on every part of Mr Brunner's business.

Prices are already in euros and Deutschmarks
Prices are already in euros and Deutschmarks
Computer systems had to be upgraded. Cash registers were made euro-ready. Salary management needed updating. The accounting system now calculates in euro.

Then there is the logistics of getting the new money into the shops, and channelling the old Deutschmark notes and coins back to the banks.

Shop assistants had to be trained, and prepared for the ultimate challenge: Dealing with confused customers who are not accustomed to new prices, new money and the fact that they get euros in return for the Deutschmarks they pay with.

Money changers

The Brunner Bäckerei has been preparing for months to get euro ready.

Every week, Stefan Brunner chairs his very own euro task force.

His team discusses technical issues, makes game plans for the euro transition, and debates the advice given by changeover experts at his bank.

The first task was to make the computer system euro-ready, and Stefan Brunner used the change to make the company more efficient.

All branches how have a computer cash register, linked to head quarters via the internet.

Ever purchase is analysed, and at the end of the day the company knows which buns, pretzels or types of bread are selling well, and where they are selling well.

This system is tied in with the supply chain, making the ordering of new bakery ingredients more efficient.

This help to save costs, and helps to cope with an unexpected side effect of the euro changeover.

Flour, sugar, salt, cheese, fruit - all the ingredients needed in a bakery are now priced in euro, and Stefan Brunner says that many suppliers have used the euro changeover for price increases.

Getting the price right

Stefan Brunner's problem is that he can't simply pass on the costs to his customers.

He has ruled out any price rises in his bakery: "Whoever uses the euro cash launch to push up publicly visible prices will be pilloried in the press, and nobody can afford that."

But getting the price right is not so easy.

For department stores it is tricky enough: Should a pair of socks, now costing 7.99 DM be priced at 4.08 euros - or should the retailer cut the profit margin and call it 3.99 euros?

And what about the CD for DM25 - will it cost 12.78 euro or can the shop (or record company) rip off consumers and price it at 13 euros?

Mr Brunner has to cut it finer. Many of his products are priced in pfennigs, and getting the euro price always involves some tricky rounding up or down.

Safety fears

And then there are the safety fears.

That starts with getting the euro cash in place.

"I run a small company with many small shops. We can't afford hiring a security firm to ferry the cash to and from all my shops every morning and evening", he says.

Some of his outlets are located in shopping malls, and he hopes to piggy-back on their arrangements for secure transport.

At the same time his banks are pushing him to collect the euro notes and coins as soon as possible.

"I've told them that I haven't got a safe large enough to store all that money. They recommended I should store the cash and coins in the basement."

Stefan Brunner did not take up the suggestion.

Spot the fake

Apart from robberies, Stefan Brunner has other security worries.

There are millions of bank notes in counterfeit Deutschmarks out there, and experts fear that fraudsters will try to use the changeover confusion to get rid of them.

At the Brunner Bäckerei, all shops have been equipped with two tests that help spot fake bank notes. Mr Brunner is set on deterrence: "There will be big signs warning fraudsters that we are well prepared".

And for extra safety, his shops will not accept any bank notes higher than DM 100 - which rules out the DM 200, 500 and 1,000 notes.

Staff training

At Brunner Bäckerei, as a rule staff go on training courses three times a year.

This year, the training programme was adjusted to incorporate the euro changeover

Currently, all shop assistants are going through the second round of euro training.

The big day

During the first days of January Stefan Brunner will find out whether months of preparations have paid off.

Holiday has been cancelled for everybody - including himself. His wife and children make good use of the two-week school holiday.

Stefan Brunner stays behind to ensure everything's alright.

Euro expectations

So does he think there will be problems?

Three months ago, Mr Brunner feared the worst, expecting chaos for weeks. "The system will be strained", he said.

Now he is more sanguine. "The longer we've discussed things, the more confident I have become".

Some shops may run out of cent coins to give change.

But most difficulties should be over after the first week, he says.

However, the costs of the changeover will be enormous. "It's difficult to estimate", says Stefan Brunner, "but I believe that the costs will exceed DM 100,000 (£, $) - even if we have no losses from counterfeit money or through robbery."

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