Archie Norman, chairman of Marks & Spencer (M&S), has compared the cyberattack last year to “three months immersion into another world.”

Speaking at the Retail Technology Show in London, Norman said his teams watched their systems degrade in real time, which resulted in the company loosing around half its profit.

He said that company shut down vital systems, including ordering and time-in software and had to relearn techniques from a pre-internet era. Staff clock-ins were noted on clipboards, while ordering and replenishment was calculated manually and sent to suppliers. The attack’s effects still linger today, Norman said.

He advised retailers to never assume their systems are unbreakable. “We have a surface of 50,000 people. Most of the recent attacks have been impersonations, not technology, so they will get in,” he said “Ask yourself what you will do when it happens.”

Norman also urged retailers to check their insurance. “Our cap was £100 million, and we received it. Insure for the catastrophe; the first £10 million is fine, you want to be protected for the £100, £200 million.”

Loyalty relaunch

M&S recently relaunched its loyalty card Sparks and Norman said the firm but it does not plan to use it to create differential pricing.

“We don’t believe that if you have our card, you should get different prices from everyone else. Tesco and Sainsbury’s have large market share, so I understand why they do it: they’re trying to prevent people from shopping elsewhere.”

Instead, M&S plans to use the card to further target advertising, aiming for “not a single wasted email” to customers

“I don’t like the expression loyalty card, loyalty comes from the product and value you offer, not a piece of plastic. The purpose of sparks card is to make the experience more rewarding for people.”

Rising inflation

Speaking about current geopolitical tensions, Norman said global disruption is set to hit the business, and food retailers more widely, in the autumn. He added that while rising fuel prices may force businesses to raise their prices, the hike may not be as high as people expect.

“I would expect by September to see food price inflation to keep up,” he said. “I’ve seen people say 9-11 per cent, but I don’t think that will happen. 1-2 per cent would not be surprising.”

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