Of the 117 senior UK retail executives interviewed for the research, 11% acknowledge their lack of preparedness for cybersecurity threats.
Cybersecurity has also been recognised by 58% of retail leaders as one of the top three risks facing their industry in the coming year, signalling increased awareness of the dangers posed by ransomware, data breaches, and system failures.
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This growing apprehension has led to an increase in investments in cybersecurity among retailers, with 64% enhancing their focus on this area over the past year. Efforts include system upgrades, response plan evaluations, and the integration of security measures throughout supply chains, according to the research.
It also noted that the complexity and interconnectivity of risks have also intensified, as evidenced by the top 30 UK-listed retailers disclosing 278 principal risks, including 40 new or escalating concerns within the last year. Cyber-related issues represent 25% of these emerging risks.
In April this year, Marks & Spencer suspended online and app orders due to a significant cyberattack and anticipated an operating profit impact of around £300m for the fiscal year 2025/26 before implementing any mitigating strategies.
Additionally, The North Face experienced a “small-scale credential stuffing attack,” prompting customer notifications.
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By GlobalDataRetail Economics chief executive Richard Lim said: “Cyber threats are no longer just an IT issue. They cut to the heart of customer trust, brand reputation and operational continuity. It’s concerning that so many retailers still lack the confidence and capability to respond effectively. Resilience today isn’t just about protection. It’s about being ready to act, recover quickly and adapt at speed.
“The most forward-thinking retailers are using cyber risk as a catalyst for broader transformation. They are accelerating investment in digital infrastructure, strengthening internal agility and embedding resilience across their operations. These are the bold decisions, made under pressure, that will shape long-term success.”
Financial pressure
Beyond cybersecurity, financial challenges loom large for retailers who are bracing for a £6.5bn surge in operating costs in 2025.
Factors contributing to this increase include higher National Living Wage rates, Employer National Insurance contributions, business rates, utilities, and property expenses.
The study showed that average pre-tax profit margins have dwindled from 10.4% in 2014 to 5.7% in 2024, a loss exceeding £7.3bn in pre-tax profits across the sector.
In response to these pressures, retailers are sharpening their focus on cost control while also investing in technology, data analytics, and supply chain fortification.
The resilience gap among retailers is becoming more pronounced. While some see themselves as ‘ahead of the game’ in risk management, a slight increase from 26% to 28%, the proportion lagging behind has risen more significantly from 21% to 25%.
A majority of retail leaders (58%) believe the performance disparity between top-performing and underperforming businesses is expanding.
Barclays UK Corporate Banking retail and wholesale head Karen Johnson said: “As operational and financial risks continue to escalate, it’s clear that embracing technological advancements and enhancing cybersecurity measures will be key to building resilience for UK retailers.”
