Food to funerals group the Co-op says the cost of April’s cyber attack could extend into next year – and admitted insurance won’t cover it
The owner of high street chain the Co-op has revealed it is still battling thousands of attempted cyber attacks a week, as it warned a previous hack could wipe £120million off profits.
The food-to-funerals group fell victim in April, but says it largely nipped the attack in the bud. Despite that, the fall-out still saw it lose more than £200million worth of sales in the six months to July, with the impact potentially still being felt into next year, when this cost could reach £300million.
It has already knocked £80million off profits, with the figure estimated to be £120million over the whole year because some of its systems are still back up to normal.
The Co-op, which is owned by its millions of members, admitted it was under insured and would not be able to recover all lose losses.
Bosses also revealed that it, like others, still face a battle to prevent hackers gaining access.
Rob Elsey, Co-op’s chief digital and information officer, told the Mirror: “We successfully prevent thousands of attacks on a weekly basis. As we build higher walls, the attackers are building higher ladders.
“What we saw here was a sophisticated, a persistent and a multi-staged cyber attack. It was very orchestrated and very well planned and meticulously executed. But we invest continuously in our cyber defences and we do that in a layered way because no organisation is impenetrable, so how you detect and you respond is incredibly important.”
According to the Co-op, the hackers used “social engineering” by pretending to be one of its employees. But the firm said that as soon as the person’s account was used, its system spotted it and “within minutes” staff took action to limit the spread.
Mr Elsey said the hackers then tried to get back into the accounts, but these were closed down. A few days later “malware” – malicious software – was found buried on the Co-op’s systems, but these were blocked.
The aim of the hackers appeared to be install “ransomware”, in which data is locked and the crooks demand money – a ransom – to allow organisations to have it back. “We are talking about 4,000 attempts a minute,” Mr Elsey added. “And this goes on for a few hours.”
Co-op chief executive Shirine Khoury-Haq claimed the root cause of many cyber attacks was “youth disenfranchisement”.
She said “I’m very proud of how we reacted: we kept trading, prioritised colleagues and vulnerable communities, and launched a partnership with The Hacking Games to tackle youth disenfranchisement – the root of many cyber threats.“The cyber attack highlighted many of our strengths. But more importantly, it also highlighted areas we need to focus on – particularly in our food business.”
The hit from the attack, and higher employee costs, saw the group slump from a £3million profit to a £75million loss in the six months to early July.
