Dive Brief:

• Rippleshot, a Chicago-based fraud protection firm, said grocers make up the No. 1 channel for data breaches in terms of the percentage of compromised accounts, according to Progressive Grocer.
• In 2016, approximately 1,000 cases of data breaches were reported by grocers. This is the highest number recorded since The Identity Theft Resource Center began tracking breaches in 2005.
• Experts say grocers need to review their network logs for unauthorized activity in order to protect their data. They also should check to see that their security professionals are doing the same. 

Dive Insight:

Data breaches are becoming a serious issue for grocers, with close to 1,000 breaches occurring in the supermarket space alone last year. The biggest threat for grocery retailers are at-rest-data breaches and malware-type breaches. The former concerns settlement files that haven’t been sufficiently secured for storage and transmission to an acquirer; while the latter involves an infectious bug being introduced into the store’s software.

Other stores have faced similar — although not as publicized — incidents. A solution that could help is introducing point-to-point encryption technology to the payment process. Security experts say there are a number of strategies that retailers should be taking, and hiring a professional who knows the ins and outs of computer security is a good start.

One of the most prominent malware incidents occurred in 2013 when hackers hit Target, affecting more than 40 million credit and debit cards. But as Josh Hartinger, manager of electronic payment technologies at Unified Grocers told Progressive Grocer, smaller retailers typically see most of the breaches. In some cases they lose so much business they have to close their store.

For large grocers such as Kroger and Wal-Mart, implementing point-to-point encryption or other technology to thwart criminals is a good idea that could protect their businesses and prevent frustrated customers from heading to other retailers. The challenge, of course, is that criminals are moving quickly to get around any fixes put in place. Big stores can pay the higher costs to upgrade their security system, but for smaller retailers the costs can be prohibitively expensive.