Spar is facing a hefty R168.7m lawsuit from one of its main franchisees, the Giannacopoulos family, over the botched SAP rollout at the wholesaler’s marquee KwaZulu-Natal distribution centre.
The family, which has previously not shied away from taking on Spar, owns and operates 46 retail stores consisting of Spar, SuperSpar and Tops shops.
The Giannacopoulos family, in court papers lodged with the Durban high court, alleges that the wholesaler’s failed SAP system rollout caused severe supply chain breakdowns, empty shelves, lost customers and hundreds of millions of rand in damages.
To this end, the family has launched losses in gross profit and gross profit margin claims of R142.9m plus interest for the financial years 2023-2025.
These losses were calculated using historical growth rates and expected margins, compared with actual performance after the SAP rollout.
The lawsuit is centred on the disastrous implementation of SAP S/4HANA at Spar’s KwaZulu-Natal distribution centre in early 2023, a project that has already cost the group an estimated R1.6bn-R2bn in lost turnover and profit.
According to the summons, Spar unilaterally implemented the SAP system in KwaZulu-Natal at the end of January 2023. The result, the retailers allege, was an immediate and sustained operational collapse.
“As a result of the introduction of the SAP software at the KwaZulu-Natal distribution centre, there was an immediate breakdown in order picking, dispatch scheduling, inventory visibility and pricing accuracy,” the court papers read.
Retailers say the failure persisted from January 2023 until at least September 2025, leaving stores unable to place orders, receive stock reliably or price merchandise correctly. As a result, shelves stood empty, promotions could not run, perishable stock went to waste and customers were lost to competitors.
The plaintiffs argue that Spar breached core obligations under its membership and supply agreements.
Beyond direct trading losses, the retailers also claim damages arising from Spar’s rebate and overrider schemes. Under these schemes, retail groups qualify for volume-based rebates if they meet annual purchase thresholds.
These claims come in at R25.8m plus interest.
Spar has previously acknowledged that the SAP project ran far over budget and caused widespread disruption. The system was intended to centralise supply chain operations, but failed due to poor data migration, warehouse integration problems and inadequate change management.
Industry reports have put the cost of the failure at about R1.6bn in lost turnover and R720m in profit by September 2023 alone. A whistleblower reportedly warned Spar management of serious risks as early as 2021, but those warnings were allegedly ignored. Several senior executives, including the group’s IT leadership, later resigned.
Spar ultimately paused the national rollout and moved to replace parts of the SAP system with alternative warehouse management software.
For the Giannacopoulos family, the lawsuit marks another chapter in a long and bitter relationship with the wholesaler. In 2020, the family regained control of 41 Spar stores after a court ruled that Spar’s attempted takeover was based on tainted information.
Since then, both sides have traded allegations of misconduct, with damages claims running into billions.
The plaintiffs are seeking contractual damages, alternatively delictual damages, for losses they say were foreseeable, avoidable and caused entirely by Spar’s decisions.
Spar Guild and Spar South Africa have been joined as defendants, though no direct relief is sought against them. Spar Group remains the primary target of the claim.
When approached for a response, Spar said that it had received the papers but would not be commenting outside of the legal process.
Spar has been through a few tough years as competition has heated up in the retail sector, with Shoprite and Woolworths both taking some market share.
Investors too have had a bumpy ride with Spar’s share price losing nearly 35% during the course of last year. While it was little changed at R91.83 on Wednesday, this is a far cry from the record high of R227 it reached in 2018.
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