Pricer's turnover dropped from SK73.9 million to SK62 million in 2003, in turn pushing the company further into the red (SK52.4 million compared to SK46.5 million a year earlier), but the company said that this had been expected because of a change of strategy to focus on "specific marketing activities and customer-adapted product development".
In essence, this meant that the company spent most of 2003 in negotiations with large and medium-sized retail chains with a view to rolling out its ESL technology in their outlets.
But with these negotiations clearly targeted at the long-term future of the company, the short term financial performance was poor - although ongoing discussions with the retail trade have at least allowed Pricer to tailor its new product development operations to the changing requirements of its potential retail customers, making its ESL system more cost effective.
While electronic tills and other EPOS systems have of course been around for years, other retail technologies such as self-scanners or customer-operated checkouts are only slowly filtering into stores, with most of the major retail chains clearly concerned about the cost of rolling out new technologies in their ever-expanding portfolio of stores.
Pricer's main customers are focused, not surprisingly, on the Nordic market, although it has also forged a successful partnership with German chain Metro, probably the most technologically advanced retail group in the world - the company has set up a Future Store Initiative to test a wide range of retail technologies, including ESL.
But the fourth quarter of the year also saw the company move into the North American market for the first time via a new distributor agreement with StoreNext Retail. It has already received its first order to supply ESL systems to two retail chains in Connecticut.
Japan is also set to be a key market for retail technology, and Pricer has set up a joint venture with local partner Ishida to develop ESL systems using new technologies to meet future requirements for the Japanese, and other, markets. The number of Japanese retail chains which operate Pricer's ESL systems increased during the year, and further growth is expected this year, although once again the cost implications mean that rollouts tend to be slow and steady rather than across the entire store portfolio.
So despite its losses, Pricer remains confident that a growing number of retail chains around the world are starting to realise the value of investing in electronic pricing and information systems in order to rationalise and streamline their operations.
"A number of large European retail chains are already installing ESL systems or are about to make significant investments in them," the company said in a statement last week. "Some of these companies are in the late stages of the evaluation process, during which they select suppliers rather than evaluate the ESL concept as such. The retail chains showing the greatest level of activity are based in France, Spain, Italy, Belgium and the Netherlands."
The most significant of these European chains is Carrefour, which last month designated Pricer as the sole supplier of ESL systems for its French retail operations. The contract was finalised after a year of detailed evaluations by Carrefour, during which time three pilot installations were made by different suppliers. The agreement should boost Pricer's revenues by an estimated SK100 million, but almost as important is the fact that Carrefour is the world's second largest retailer - thus providing significant future growth opportunities.
"The market is continuing to grow, with an increase in the total number of installations and genuine interest from several major retail chains," the company said. "The total market for ESL systems is about to see the start of a breakthrough. However, evaluations and negotiations taking place within a number of retail chains are taking longer than could have been expected. Pricer's sales will increase significantly during 2004 and results will improve."
With just 450 stores worldwide currently operating Pricer's ESL system - albeit stores owned by some of the world's biggest retailers - a breakthrough is clearly needed if the company is to haul itself back into the black. But with so little to differentiate between the major retail chains, supermarket groups are forever looking for something to give them a new 'edge' - opening up the door for a wide range of electronic systems which can help improve supply chain efficiency and reduce costs.