LONDON :A “sophisticated” cyberattack in April will cost the Co-op Group about 120 million pounds ($161 million) in lost profit this year, the British retailer warned on Thursday.
The 181-year-old member-owned Co-op, which runs one of the UK’s most well-known food retail businesses as well as funeral-related services, legal and insurance operations, said it acted “quickly and decisively” to temporarily shut down several systems to contain the threat.
That led to operational disruption, including hitting food availability in stores.
British companies and institutions have been hit by increasingly aggressive and regular cyber and ransomware attacks in recent years, with the British Library, a blood testing service, the London Underground, Marks & Spencer and Jaguar Land Rover all suffering months of disruption.
The impact on the Co-op’s revenue in its first half to July 5 was 206 million pounds, with an 80 million-pound hit to profit.
Finance chief Rachel Izzard said the full-year profit hit was estimated at 120 million pounds, inclusive of limited insurance recovery.
“We had the front-end elements of cyber insurance in place in terms of the immediate response capabilities in the technology space for third parties, but we don’t believe we will be claiming on insurance for back-end losses,” she said.
The 40 million-pound hit in the second half partly reflected investment to harden the group’s cyber defences.
Rob Elsey, the Co-op’s chief digital and information officer, said the attackers, as was the case with M&S, entered the group’s systems through so-called social engineering: “They impersonated a colleague to access their account.”
The Co-op reported a first-half underlying loss before tax of 75 million pounds, versus a profit of 3 million pounds in the same period last year, on revenue that was down 2.1 per cent to 5.5 billion pounds.
Revenue in the food retail business fell 1.6 per cent to 3.6 billion pounds, with the group ceding market share to rivals.
In the second half the Co-op expects “continued cost headwinds, global volatility and high competition.” It plans 30 store openings.
($1 = 0.7437 pounds)
