Retailers handle huge volumes of customer data, making them prime targets for cyberattacks. When breaches happen, the financial, reputational, and operational fallout can be devastating.
This blog explores the true cost of a retail data breach and explains why regular penetration testing is a smart, proactive investment, not just a compliance checkbox.
Real-life examples of retail breaches
Data breaches in retail can be business disasters. When attackers strike, the consequences ripple fast: customer data is leaked, operations come to a standstill, and trust is lost. These real-life examples show exactly how that happens.ee education and training
Internal teams are often the first line of defence for small businesses, so training them to recognise and effectively respond to cybersecurity threats is vital. Training can help them to recognise phishing attempts, avoid suspicious downloads, and follow best practices for safe internet use, significantly reducing the risk of cyberattacks. Well-informed employees can prevent many common threats before they cause harm.
JD Sports
In January 2023, JD Sports revealed that personal data from 10 million customers had been compromised, including names, addresses, phone numbers, and partial payment details. While the company didn’t disclose the total financial impact, the reputational damage was clear. Negative headlines across national news, anxious customers, and a dent in brand loyalty all impacted JD Sports during an important sales period.back-ups of crucial systems
WHSmith
WHSmith’s breach also occurred in 2023, exposing confidential staff (current and former) information. This type of breach puts employees at risk of identity theft and fraud. Beyond the data loss, the incident disrupted internal systems and prompted an urgent response effort, diverting resources from day-to-day operations.
MGM Resorts
The MGM Resorts attack is a reminder that cyber incidents can paralyse customer-facing services. Although not strictly retail, it’s still a relevant case: ransomware shut down computer systems, cash machines, and hotel key cards for days. The company reportedly lost over $100 million in revenue and remediation costs alone.
Marks & Spencer
Most recently, in April 2025, M&S suffered a major cyberattack via a third-party contractor. The breach disrupted online orders, logistics, and warehouse systems, causing stock shortages across stores. Customer data was stolen, resulting in severe financial fallout, with £300 million in lost profit and over £600 million wiped from its market value.are the impacts of cybersecurity threats on small businesses?
Breaking down the real cost of a retail data breach
When a breach occurs, the losses aren’t just about stolen data; they stack up fast across multiple areas.
Here’s a breakdown of what retail businesses face in the event of a cybersecurity breach:
Financial costs
The indirect costs of a breach can be staggering:
- Incident response: Forensic investigation, legal advice, and crisis communications can cost anywhere from a few thousand to millions of pounds, depending on the size of the organisation.
- Regulatory fines: Under laws such as GDPR or PCI DSS, even minor oversights can result in six- or seven-figure penalties.
- Revenue loss: Significant sales dip during outages or as customers switch to competitors. In some cases, platforms may be offline for days.
- Ransom payments: If ransomware is involved, the pressure to pay up is immense, particularly during peak seasons when businesses are eager to remediate any issues quickly.
According to IBM’s 2024 ‘Cost of a Data Breach’ report, the global average breach now costs $4.9 million, with retail breaches averaging around $3.48 million. That figure doesn’t include long-term damage like churn or reduced investor confidence.
Operational disruption
A successful cyberattack often grinds retail operations to a halt. This might include:
- Frozen payment systems and POS terminals
- Delays to online orders or refunds
- Staff time diverted to manual processes or remediation
- Disrupted supply chains and logistics
In worst-case scenarios, stores or platforms may temporarily shut down. Even if you’re back up in hours, the knock-on effects can last for weeks.
Reputational damage
Brand trust is everything in retail. One breach can undo years of customer loyalty:
- Customers may stop shopping with you out of fear or frustration.
- Negative headlines can dominate search results and social media.
- You may be forced into reactive PR or customer compensation.
Worse still, the perception that your security is lax can hurt future growth, whether it’s enterprise partnerships, investor due diligence, or expanding into new markets.
Why retail is a high-value target for attackers
Retailers hold a goldmine of customer data, including names, addresses, payment details, loyalty schemes, and behavioural insights. Unlike heavily regulated industries like finance or healthcare, retail often operates with thinner margins and tighter security budgets, making it a more attractive target for cybercriminals.
The retail industry is particularly vulnerable to cyber attacks for a number of reasons:
High transaction volume, high reward
Retailers process thousands of transactions every day, many involving sensitive payment data. Attackers can quickly extract valuable information, gaining access to credit card details, login credentials, or even loyalty points ripe for resale.
Complex digital ecosystems
From e-commerce platforms to POS systems and third-party logistics providers, retailers rely on a tangle of integrated systems. Each vendor, API, or connection is a potential entry point, and attackers only need to exploit one to access the entire ecosystem.
Seasonal spike creates opportunity
During sales events like Christmas or Black Friday, systems are under heavy load and security teams are stretched. Attackers often time their campaigns to exploit this pressure, knowing businesses may overlook unusual activity.
Outdated or unsupported systems
Many retailers continue to use legacy technology, particularly in their physical stores. These systems may no longer receive security updates, leaving internal critical vulnerabilities exposed.
Penetration testing: Your first line of defence
Penetration testing simulates real-world cyberattacks to uncover weaknesses in your systems before malicious hackers can exploit them. It’s an essential way for retailers to understand where their defences fall short and fix them fast.
There are different types of pentests suited to retail:
- External tests simulate an attack from outside your network (e.g., web applications, networks, FTP servers, mail, routers, login systems, and sub-domains).
- Internal tests mimic threats from within, like a compromised staff account or an insider threat.
- Web application tests focus on vulnerabilities within your online platforms – shopping carts, customer logins, and payment portals.
How does regular pentesting mitigate Breach risks?
With cyber attacks constantly evolving, a one-off test isn’t enough. Regular pentesting helps retailers:
- Proactively identify and patch vulnerabilities before attackers can exploit them.
- Stress-test new platforms or integrations to ensure security holds up under real-world conditions.
- Meet compliance and insurance obligations, including PCI DSS, ISO 27001, and cyber insurance audits.
- Demonstrate strong cyber resilience to customers, investors, and board members.
When should a retailer invest in pentesting?
Retailers should invest in penetration testing regularly, not just after a breach or before a major launch. Best practice is to test at least annually, and more frequently after significant changes like website rebuilds, new software integrations, or mergers. Seasonal sales periods are also high-risk windows, so testing beforehand is essential. Pentesting should also be part of vendor onboarding, especially when third-party platforms handle sensitive customer data.
A retail data breach can cost millions and damage trust in an instant. Penetration testing is your first step toward prevention. OnSecurity makes it easy, fast, and hassle-free. Testing at the right time can help you identify and address system flaws before attackers find them, making pentesting a proactive, ongoing layer of your security strategy.
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