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Operational Resilience failures in the UK Retail Sector: A Wake-Up Call

1 12 May 2025 Be the first to comment

Samuel Crompton

Associate Partner (Banking, Resilience and AI)

IBM

Operational resilience failures have been increasingly in the headlines recently, exposing cracks in the UK retail sector. With consumers feeling the impact, there’s a renewed urgency for retailers to strengthen their business continuity, with disaster recovery strategies now higher on the agenda than before.

While the banking sector has undergone a regulatory transformation in response to the PRA/FCA operational resilience guidance issued in March 2025, the retail sector is still grappling with the challenges of operational resilience.

A few recent examples

Cybersecurity breaches: UK retailers continue to be prime targets for cyberattacks. In 2023, a ransomware attack on JD Sports compromised the personal data of over 10 million customers, whilst most recently, the crippling attack on M&S this month paralyzed its systems, suspending online orders. These types of breaches highlight the sector's vulnerability to sophisticated cyber threats the alarming lack of planning and preparation for such incidents, reinforcing the need for robust defence and recovery strategies.
Post-Brexit customs delays: Following the UK's exit from the European Union, many retailers experienced significant delays at ports due to increased customs checks and documentation requirements. In 2021 and 2022, major UK supermarkets, including Sainsbury's and Tesco, reported shortages of fresh produce and chilled goods, exposing the fragility of just-in-time supply chains.
CrowdStrike Incident (April 2024): A misconfigured update from cybersecurity provider CrowdStrike inadvertently caused widespread endpoint outages across multiple UK businesses. Several large retailers were forced to display 'cash only' signs, due to experienced point-of-sale system failures, leading to store closures, long queues, and lost revenue during peak trading hours.
Boots IT System Outage (October 2024): Boots suffered a major IT system outage affecting over 2,000 stores nationwide. The disruption, linked to a failed infrastructure upgrade, brought down prescription services, payment systems, and supply chain functions. The incident drew criticism from regulators and customers alike, spotlighting the sector's overreliance on legacy systems, without sufficient resilience controls.

Lessons to be learnt from the Banking sector

Banks are now required to define important business services, map dependencies, set impact tolerances, and conduct rigorous testing to ensure resilience under stress, as a result of undergoing a regulatory transformation in response to the PRA/FCA operational resilience guidance issued in March 2025. There’s valuable lessons retailers can take from the banking sector’s more mature approach to operational resilience.

Firstly, the development of robust business continuity and disaster recovery plans are essential and must be regularly reviewed to stay effective against evolving threats like IT failures and cyberattacks.

Secondly, just as banks run routine stress tests, retailers should conduct regular simulations to ensure their plans work in practice, not just on paper.

Sustained investment in cybersecurity should also be on retailers' checklists. From advanced threat detection to staff training, it is critical to prevent and contain breaches before they disrupt operations, to reduce the overall risk and impact of data breaches or ransomware attacks.

Resilience - Retail’s new differentiator?

While the UK banking sector has long taken a disciplined approach to operational resilience, retail is still catching up. It’s about time retailers followed suit. By prioritising resilience, from continuity planning to cybersecurity, retailers can not only protect their operations and stand out in a competitive landscape, but also win customer trust, showing customers that their data, experience and loyalty are in safe hands.

Resilient retailers don’t just survive. They lead, adapt and outperform. With much to be gained, perhaps it’s time retailers thought about operational resilience as a growth strategy for their businesses, not just a safety net?

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Samuel Crompton

Associate Partner (Banking, Resilience and AI)

IBM

Member since

17 Jul 2019

Location

London

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