According to research conducted by the government’s Cyber Streetwise campaign and KPMG, small retail businesses are underestimating the potential impact a cyber attack could have on their reputation and must take steps to protect it.

Despite 97 per cent of respondents claiming to think about their company’s reputation frequently or all the time, they are not considering the potential effect a cyber breach could have. Just 27 per cent of those surveyed that have never experienced a breach say that the potential damage caused by a breach is an ‘important’ consideration.

The majority (83 per cent) of small retailers are currently concerned about the security of their data and which companies have access to it, whilst 58 per cent say that a cyber breach would discourage them from using a business in the future.

A cyber attack is a greater concern in the supply chain, as 86 per cent of procurement departments canvassed in a separate KPMG survey would consider removing a supplier from their roster due to a breach, highlighting the short and long-term implications an attack could have. With 94 per cent of procurement managers citing cyber security as important when awarding projects to an SME supplier, small businesses should take steps to ensure that their data remains safe.

The majority of the small retail businesses that have experienced a breach (77 per cent) felt that the attack impacted upon their reputation in some way, with 26 per cent reporting brand damage, 24 per cent reporting a loss of clients and 27 per cent receiving negative reviews on social media.

The latest research suggested that the lack of concern around reputation damage could be due to small retailers not realising the value of their data. Although 89 per cent of the respondents store their data in their IT systems, over a third (34 per cent) do not consider their data to be commercially sensitive, while just 5 per cent say they would be immediately concerned about competitors gaining an advantage were they breached.

Despite the majority of consumers worrying about the security of their data, 54 per cent of small retail businesses do not believe that they will be the target of an attack.

Danny Lawrence, National Police Chiefs’ Council PROTECT co-ordinator for cyber crime, stated: “A cyber attack may prove so serious that it impairs an organisation’s ability to operate and even function longer term. Doing nothing can no longer be an option - SMEs place their reputation and existence on the line if they fail to take action. I would encourage all SMEs to consider their cyber security, seek out support from resources available and consider making this piece of work a critical part of their business strategies in 2016.”

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