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Croatia’s largest retail chain prepares for introduction of euro Studenac

Croatia’s largest retail chain prepares for introduction of euro

Written by  Aug 25, 2022

Studenac Market, Croatia’s largest retailer by number of stores, is preparing for the country’s adoption of the euro currency with initiatives including customer communication, employee training and ensuring IT systems are capable of handling the new currency.

All prices in the Adriatic country must be displayed in both the euro and the local kuna currency starting Sept. 5, but euro notes and coins won’t be accepted until January 1. For the first two weeks of the new year, customers will be able to use either currency, and those paying in kuna will receive their change in euros. Prices will continue to be displayed in both currencies until the end of 2023.

Studenac Chief Financial Officer Michał Halwa is in charge of the transition for the company’s more than 1,000 stores, as well as its centralized IT systems. He and his team are working with other business units, including marketing and operations, to ensure the changeover is smooth and complies with a Code of Ethics published by the government agency in charge of the switch.

“This is a huge change for all of Croatian society, as well as for Studenac as one of the country’s leading retail chains,” Halwa said. “Fortunately, there are several factors working in our favor, including familiarity with the euro among the majority of Croatians. For our part, we’re working hard to ensure a smooth transition for our employees and our customers.”

The transition comes as consumers and retailers around the globe are struggling to respond to surging inflation, and transparency about pricing and conversion will be key to maintaining customers’ trust, Halwa said. Studenac began displaying prices in euros in mid-August, ahead of the Sept. 5 deadline. In total the company will print more than 7 million price labels as part of the changeover.

With more than 5,500 employees, Studenac has almost tripled its number of stores since the company was purchased in 2018 by private equity fund Enterprise Investors. From its original location on the Dalmatian coast, one of Croatia’s primary tourist regions, the company has built a presence in 17 of the country’s 20 counties, plus the capital city Zagreb.

Following are comments from Studenac CFO Michał Halwa on various aspects of the euro adoption process:

On consumer behavior:

“This is a big mental challenge, and people of different ages adapt differently to changes. The good news is that because of the euro’s role in tourism, for example with many people pricing

accommodation or other services in euros, there’s already a lot of familiarity with the currency and a lot of support for making the shift. That will definitely help to cushion the shock.”

“During the pandemic, many people shifted to contactless payments because they didn’t want to handle notes and coins. The lower use of cash will make the transition easier than it would have been otherwise.”

On the logistical challenge:

“Getting all the euro notes and coins to the stores at the end of December will be a challenge; we’re working with banks and security companies to plan a smooth, safe handover. We also need to manage our stocks of kuna cash at the end of December, because after January 1 we won’t be able to give them back to customers as change. Also, because of the denominations of the two currencies, with the euro we’ll be using a lot more coins than with the kuna.”

On the Code of Ethics for business:

“We are fully committed to following the Code of Ethics for business, which will allow us to display the logo of this initiative in all our stores. The Code includes seven provisions, on matters such as not using euro adoption as an excuse for price increases; how prices are advertised, displayed and converted; and how employees are trained to communicate with customers.”

On training for employees:

“We have to train all of our frontline employees to recognize euro notes and coins. It’s also crucial that they understand the transition process, and that they’re able to explain it to customers who may have questions. It may seem simple, but one of the most important messages is that even though prices are displayed in euros, people can’t pay in euros until January 1."

On the challenges for IT providers and users:

“Adjusting our IT systems is a huge challenge, of course – we have to make sure they can show dual prices, and that our cash registers can print the proper receipts. And we have to adjust all of our back office systems – accounting, payroll and everything else. Some vendors are adjusting their current systems, while others are requiring their clients to upgrade to new systems. Fortunately this doesn’t affect us, because we’re already using the newest versions, but this could be risky as you also have all the other potential difficulties with adopting a new system, such as the need to train users on a new interface.”