SOFTWARE WOES RESULT IN $33M CHARGE AT SOBEY'S THIS QUARTER

BRIAN DUNN

STELLARTON, Nova Scotia (FNS) -- Sobeys here said last week it will take an after-tax charge of almost $33 million in the current quarter to cover its decision to drop its computer software program following major disruptions in its grocery operations.

The company said the complexities of the system and a five-day database and systems disruption in December led to its decision to drop the program from SAP AG of Germany.

"We have determined that there is insufficient core functionality in the SAP software component of our enterprise-wide systems to effectively deal with the extremely high number of transactions in our retail operating environment," said Bill McEwan, Sobeys president and chief executive officer.

The disruption resulted in some stores in Ontario and Atlantic Canada being out of stock. The grocer has switched to another system.

McEwan told analysts in a conference call that Sobeys is looking for acquisitions and predicted sales could increase to $11.5 billion next year from $8 billion this year.