Spar tweaks SAP rollout strategy amid lawsuit
Spar is adjusting its SAP implementation strategy and faces a R168.7 million lawsuit due to issues with the initial rollout.Summary
Spar Group is revising its SAP enterprise resource planning strategy, shifting focus from full distribution centre integration to capability enablement, following challenges during the initial rollout, particularly at its KZN distribution centre. The changes aim to reduce disruption and execution risk by separating finance from distribution centre operations. This comes as Spar is embroiled in a R168.7 million lawsuit filed by a franchisee, the Giannacopoulos family, over the failed SAP implementation which impacted stock deliveries and retailer loyalty, resulting in an estimated R1.6 billion sales impact.
An internal whistleblower letter revealed that concerns about the rollout were previously ignored by three directors who have since left the company. While most affected retailers have reached settlements, the current claim significantly exceeds the initial R5 million. Service levels at the KZN distribution centre have reportedly stabilized.
Furthermore, Spar announced the departure of Group CEO Angelo Swartz, effective February 28th, and appointed current CFO Reeza Isaacs as his replacement. The company is also undertaking structural initiatives to optimize its cost base and improve margins amidst a highly competitive market and rising costs, including continued investment in the SAP rollout planned for FY2026.
(Source：Itweb)