The company, which owns Victoria Wine and Thresher, told Computer Weekly it needs to double capacity but has no plans to upgrade the system before the crucial Christmas trading period.
The group only has 24 telephone lines to process payments from nearly 2,400 stores - one line per 100 stores - and the IBM RS6000 servers processing electronic point of sale (Epos) transactions are also suffering from under-capacity.
"We have got a capacity issue in general. In peak trading hours we sometimes struggle to process demand," admitted First Quench's customer services manager for systems, Jason Hart.
However, the planned upgrade has been stalled until next year - leading to fears that off-licences could find their tills frozen in key Christmas trading hours. Hart said the system's capacity needs to be "at least doubled".
EDS, which won the group's five-year IT contract in August this year after taking over from in-house IT operation CMS, confirmed that it has recommended an upgrade but will not begin work until 2001.
Dave Condron, client delivery executive at EDS, said, "First Quench is in a Catch 22 situation, on the one hand it is coming to the busiest time in the year and will need more capacity. On the other, it wants to be able to trade and an upgrade might interfere. It has taken a business decision not to upgrade until after Christmas."
Computer Weekly was alerted by concerned Thresher staff who complained of queues "out of the building" during busy hours as they are unable to handle any other payments while credit authorisation is being processed.
"It is worst when both tills are handling credit cards. We have to ask people to either please be patient or come back later," said one Thresher manager.
Condron said the problem is not just limited to credit cards. "There are similar problems when processing Switch and Delta debit cards. The number of debit transactions has increased greatly from the time when the system's spec was originally drawn up and has blown their estimates on card transactions."