sir price group said Thursday that Oracle’s implementation of a new business management software system negatively affected its full-year results for the 52 weeks to April 1, 2023.
The implementation of a new Oracle merchandise ERP system in April 2022 was a “significant milestone” for the retailer, de-risking its in-house built and legacy IT environment and building a firm platform for its growth ambitions.
However, post-launch stabilization challenges were encountered, resulting in “significant disruptions and distractions” to business activities. He stressed that problems like these are “typical” in companies this large.
“An internal diagnosis by management revealed that the system outage affected the group’s competitive advantage from seasonal trading and the execution of key sales planning, inventory and margin management activities during the year,” it said.
Businesses often face challenges implementing complex ERP systems, and Spar Group warned last week that significant difficulties with implementing an SAP system had cost it R786m in lost wholesale turnover in the six months to the end of March 2023.
Price had embarked on Oracle’s project to provide a “seamless experience for customers, whether in store, on the web or on a mobile device, that allows them to browse, shop, track an order, collect or return items to through any of these channels,” he said.
The retailer said its Oracle ERP project was successfully completed on March 15 and the problems are behind us.
Mr. Price reported lower annual profit and less sales in its year-end results. The company, valued at R35.9bn on the JSE, saw a 6% drop in annual profit due to inflationary pressure on consumers and Eskom power outages. The cargo shedding cost him around R1 billion in revenue.
The cumulative amount of load shedding from September 2022 to March 2023 was greater than the previous 15 years combined, resulting in an estimated annual loss of 318,000 trading hours, equivalent to around R1 billion in revenue, the company reported.
The indirect impact of load shedding on changing customer buying behavior and lower levels of consumer confidence, along with the need to reduce higher levels of unsold stock, also weighed on the group’s performance in The second half.
“As a value retailer, the group had been conservative in its investment in backup power, as the historical load shedding implementation was manageable until September 2022, after which it escalated to unprecedented levels,” Price said.
Backup batteries and inverters have been installed, and an investment of R220 million should cover all the group’s stores by the end of June.
“Potentially higher stages of load disconnection during the winter threaten to extend this disruptive retail cycle. Load shedding has become a permanent and tedious roadblock for businesses in South Africa and the cost of doing business has risen sharply, stifling economic growth,” the company added.
In the telecommunications segment (which made a 3.3% contribution to retail sales), revenue increased 4.5% to R1.2 billion. In-store cellular merchandise presence increased to 465 stores, and 12 stand-alone cellular stores continue to perform strongly.
In addition to selling cell phones, Price also has a mobile virtual network operator that runs on the Cell C platform. It sold more than 800,000 cell phones and accessories during the year. – © 2023 Central Media News