Sainsbury's chief executive Justin King is blaming the company's recent poor performance on failing IT and supply chain systems, despite having spent £3bn on technology in recent years.

The company will take a £550m charge on its profits this year, as it scraps its supply chain management system and reverts to manual processes to prevent it over and under ordering stock.

A Sainsbury's spokeswoman says around half of the £550m charge is attributable to IT write-offs.

'Our supply chain systems and automated depots are not fully operational. And the IT systems that were built to back up that have not delivered,' King said. 'The IT cost is a greater proportion of sales than they were three years ago.'

'The system was developed to account for stock but the system can't see the stock on the shelves.

'The problems happen most often when we revamp a range. The system could not allocate the range because it could not see that we had taken old stock off the shelves. Every store is now going to manually update the stock levels on its shelves,' he said.

Accenture won the contract to implement the largely Sun-based systems that form the core of Sainsbury's systems. King says this contract will be renegotiated.

'We will renegotiate our contract with Accenture because they can and should help us get systems where they need to be and because the current contract has been unable to do that. The balance of responsibility currently lies far too heavily on Accenture,' said King.

'We are acutely aware that, with Christmas coming, we must minimise the effect of stock availability and will re-open the Buntingford depot that was due to be closed, giving managers back the ability order stock manually.

'We will write off supply chain systems costs either as a result of the fact the systems are no longer of any use to the business or because they will have to be used in radically different way, at a cost of £120m write-down.'

'Some of the IT systems' functionality will have to be switched off or not used at a cost of £140m write-down.'

'Supply chain costs on a per case basis are greater today than they were four years ago.'

The company's decision to move away from the current system is a sharp U-turn away from the plans of King's predecessor, Sir Peter Davis, who had staked the company's resurgence on a multi-billion pound IT investment project that was supposed to deliver a brand new supply chain system.

Sir Peter spent £3bn over four years on new technology systems across the company's warehouses and distribution network, but by this year the company had slipped into third place in the UK grocery market that it once led, behind Tesco and Asda.