By Liz Young
Stop & Shop, a grocery chain with more than 350 stores across the Northeast U.S., is grappling with product shortages at some locations after a cybersecurity incident nearly two weeks ago led to disruptions in its supply-chain and delivery operations.
Owner Dutch conglomerate Ahold Delhaize, whose U.S. unit also owns Food Lion, Hannaford and other grocery chains, said on Nov. 8 that it had detected a "cybersecurity issue" within the U.S. network. The company shut down some technology systems across its brands after the disruption, including some pharmacy and e-commerce operations.
Ahold Delhaize said its security team is investigating the matter along with external cybersecurity experts and has notified law enforcement. It didn't disclose additional details, including whether it was a cyberattack or the revenue impact of the disruption.
The cyber incident affected Stop & Shop's supply-chain operations, leading to shortages of fresh produce, meat and dairy products at some of the grocer's locations in Connecticut, Massachusetts and Rhode Island.
On Thursday, a spokeswoman for Ahold Delhaize said the shortages are expected to be resolved by the end of this week ahead of the Thanksgiving holiday. The company's e-commerce operations including grocery delivery and pharmacy services are back up and running across all its brands, she added.
Companies face a range of cybersecurity threats and disruptions as they increase their reliance on technology for tasks such as managing inventory, filling online orders and scheduling deliveries. Cyber issues in recent years have disrupted supply chains for goods ranging from food and consumer products to medical supplies.
A ransomware attack on meatpacker JBS in 2021 knocked out production, pushed up wholesale meat prices and complicated livestock deliveries from farms.
Consumer-products manufacturer Clorox last year experienced a cyberattack that led to shortages of some products.
A blood distributor in the Southeast U.S. in July suffered a cyberattack that disrupted distribution of blood products.
Recent cyberattacks are going beyond customer data to target business operations.
Hackers "have decided that, 'Hey, if I go after the supply chain, I'm going to really affect their business, versus just if I go after their consumers,'" said Mark Batchelor, chief technology officer of Verosint, a cybersecurity platform that aims to provide companies with real-time threat detection.
Retailers are working on protecting their supply chains against cybersecurity threats to prevent such stockouts, said Oday Abbosh, global managing partner of sustainability, finance and supply-chain transformation at IBM Consulting.
"We're seeing the demand for cybersecurity services just increasing dramatically," Abbosh said.
David Bishop, a partner at grocery research firm Brick Meets Click, said companies are searching for ways to make their supply chains more resilient to avoid product shortages and disruptions to online services such as grocery delivery.
"The one thing retailers do not want to do is ever give their customers a reason to shop somewhere else. When you dissatisfy a customer, you're giving them a reason," Bishop said. "This is definitely something the broader industry will be looking at and watching and trying to understand what are the lessons to be learned from it."
Write to Liz Young at liz.young@wsj.com
(END) Dow Jones Newswires
November 21, 2024 14:52 ET (19:52 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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