Spar attributes losses to SAP

Spar Group attributes a R1.6-billion loss in turnover and a R720-million profit hit to a troubled SAP implementation in its KwaZulu-Natal region. 

The project, initiated in October 2022, faced go-live and integration issues, leading to operational disruptions. Spar took corrective actions, including servicing stores from other centers, but only fully resumed KZN operations in August 2023. While the SAP system is now stable at KZN, its rollout to other Southern African regions is delayed for optimization. Spar acknowledges a R94.1-million write-off for the SAP “asset under construction” and emphasizes lessons learned for future implementations.

“The learnings during this transition phase have been immense,” – Spar said.

As a result of the change in approach towards the SAP implementation roll-out for the foreign regions, it said a write-off of R94.1-million in respect of the SAP “asset under construction” has been recognised in its books.

“Management believe that they have identified the key issues that resulted in the shortcomings of the KZN DC SAP roll-out and that they now have the right team and resources in place to appropriately plan for future implementations in Southern African regions,” – the company said.