What: Co-op has reported a financial loss after revealing the full extent of a cyber-attack that severely disrupted its operations and customer data security.

Why it is important: This event highlights the escalating financial and reputational risks of cyber-attacks in retail, reinforcing the urgent need for robust digital security and rapid recovery strategies.

Co-op’s recent disclosure of a financial loss following a major cyber-attack underscores the mounting challenges faced by retailers in an era of escalating digital threats. The attack not only disrupted daily operations but also compromised customer data, exposing the retailer’s vulnerability to sophisticated ransomware and third-party breaches. This incident is part of a broader pattern seen across the UK retail sector in 2025, with high-profile cases at Marks & Spencer and Harrods resulting in significant financial losses, operational paralysis, and a sharp decline in customer recommendation rates. The average cost per ransomware attack has reached £1.4 million, and the sector’s reliance on external providers has been implicated in 41% of breaches. As a result, retailers are shifting from a prevention-only mindset to prioritising rapid recovery and resilience, while cyber insurance premiums have risen by 10%. The Co-op’s experience highlights the urgent need for integrated security strategies and robust contingency planning to protect both business continuity and consumer trust in an increasingly digital retail landscape.

IADS Notes: The Co-op’s swing to a loss after the full impact of its cyber-attack reflects a sector-wide escalation in digital threats, as documented in Retail Week (August 2025) and Inside Retail (May and June 2025). In April 2025, Marks & Spencer suffered a £300 million profit impact and a £700 million market value loss due to a ransomware attack, with similar breaches at Harrods and Co-op soon after. These incidents, detailed in Financial Times (May 2025), have exposed the acute vulnerability of retail supply chains, with 41% of breaches traced to third-party providers and average losses per attack reaching £1.4 million. The Co-op breach alone compromised up to 20 million customer records, prompting a sector-wide shift from prevention to rapid recovery, as noted in Retail Week (May 2025). Customer trust has also been undermined, with recommendation rates for leading retailers dropping from 87% to 73%. This wave of attacks has driven a 10% rise in cyber insurance premiums and forced retailers to fundamentally reassess their risk management strategies, underscoring the urgent need for resilience and coordinated response across the industry.

Co-op swings to a loss as full impact of cyber-attack revealed