The global retail industry continues to face severe ransomware threats, losing millions to increasingly sophisticated cyberattacks even as defensive capabilities improve. Sophos’ latest State of Ransomware in Retail report highlights that ransomware remains one of the most financially damaging risks for retailers, driven by stealthy infiltration techniques, escalating ransom demands, and operational disruptions.
Unknown Security Gaps: The Biggest Threat
Sophos found that 46% of ransomware attacks in retail originated from unknown security gaps, underscoring persistent visibility challenges. While known vulnerabilities remain a major entry point, retailers are increasingly being targeted through overlooked weaknesses in remote access systems and internet-exposed infrastructure.
Ransom Demands Surge, Retailers Still Paying
The median ransom demand doubled to $2 million, while average payments rose to $1 million, reflecting a more aggressive posture from cybercriminals. Although some companies successfully negotiated lower payments, 58% of retailers whose data was encrypted still paid ransom, highlighting the urgent need for stronger recovery mechanisms.
Encryption Falling, But Attackers Are Adapting
For the first time in five years, data encryption rates dropped to 48%, indicating improved early-attack detection. However, attackers have shifted tactics, tripling extortion-only attacks—from 2% in 2023 to 6% in 2025—where data is stolen and used for blackmail without encryption.
Financial and Operational Damage Persists
Despite improvements, ransomware remains costly. Average recovery expenses (excluding ransom) have fallen to $1.65 million, still a major burden for retailers. The attacks also took a human toll: 47% of IT teams reported increased pressure, and 26% of retailers replaced leadership after encryption-related incidents.
Limited Expertise and Patch Gaps Hampering Defense
A lack of in-house expertise (45%) and gaps in security coverage (44%) were major contributors to successful attacks. Many retailers continue to struggle with timely patching, real-time threat visibility, and round-the-clock monitoring.
Industry’s Path Forward
Sophos recommends retailers strengthen risk management by improving asset visibility, patching aggressively, practicing incident response drills, and adopting Managed Detection and Response (MDR) services to mitigate sophisticated threats. As retail digitization accelerates, ransomware readiness is now central to ensuring business continuity and protecting customer trust.
