The parent company of the Canadian Sobey’s and FreshCo supermarket chains says the direct and indirect costs from last year’s cyber attack could add up to over $54 million, not including insurance payments.
Empire estimates, based on available information, that the final impact on net earnings over fiscal 2023 and fiscal 2024 will be approximately $32 million, net of estimated insurance recoveries.
The numbers are included in the latest quarterly results issued today by Empire Co.
Direct impact of the November attack on the company’s net earnings are estimated at $39 million after an unspecified amount of insurance payments are received. In addition, the estimated cost of related sales and impacts such as the temporary loss of advanced planning, promotion, and fresh item management tools, temporary closures of pharmacies and customers’ inability to redeem gift cards and loyalty points is $15 million.
To put that in perspective, IBM estimated the average cost of a data breach to a Canadian organization was $7 million.
The quarterly report refers to the attack as a cyber incident, although Bleeping Computer says evidence suggests the company was hit by the BlackBasta ransomware gang.
“Empire is in the process of working with its insurance providers to make claims under its policies,” the quarterly financial report says in part. “Due to the complexity of the cyber insurance coverage and related claims, there will be a time lag between the initial incurrence of costs and the recognition of insurance proceeds. While the impact of the cybersecurity event is subst ..
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