Corporate Partners

Two US supermarket chains report major computer break-ins

Total number of stores affedted claimed to be up to 1000

Supermarket chain Supervalu has reported that more than 200 stores were affected by a computer break-in that exposed customers' debit- and credit-card numbers and other data.

In addition, AB Acquisition, which operates Albertson's, ACME Markets, Jewel-Osco, Shaw's and Star Markets, also reported on Thursday that customer payment card data were stolen from its stores in about two-dozen states.

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Supervalu is AB Acquisition's IT services provider, and at least one expert believes hackers broke into the computer systems of Supervalu first and then found their way into the systems of the other supermarket chain.

"I'm like 99.99999 percent sure that once the attackers were in Supervalu, they had administrative level access and they were able to abuse that to get into AB Acquisition," Lucas Zaichkowsky, enterprise defense architect at digital forensics company AccessData, said.

AB Acquisition did not say how many of its stores were affected, but The Wall Street Journal reported that the total number of stores impacted, including Supervalu, may be as many as 1,000.

The companies reported on the break-ins separately, but each said that card data might have been stolen between June 22 and July 17. The companies did not say how many customers might have been affected.

Stolen data included payment card numbers, expiration dates and cardholders' names. The companies said there was no evidence the data had been misused.

Federal law enforcement authorities had been be notified and were investigating.

Supervalu reported that the systems compromised were used by a total of 209 stores in seven states. The company owns and franchises stores, including Hornbacher's, Cub Foods, Farm Fresh, Shop 'N' Save and Shoppers.

The hackers may have installed malware in the companies' point-of-sale (POS) systems, The Journal reported. The same tactic was used to steal credit- and debit-card data from Target late last year. That break-in affected 70 million accounts.

Such attacks can be stymied through the use of encryption that starts when the card is swiped, Zaichkowsky said. The data is not decrypted until it reaches the servers of the payment processor, which holds the decryption keys.

Most retailers use POS systems that handle card data in plain text. Upgrading to a system that provides end-to-end encryption from the reader to the payment processor would involve new software and readers.

For large retailers, the upgrade would be expensive, but the cost would have to be weighed against the expense of a major break-in.

"It's a bit of a process and it cost some money to do it, but with how much hacking is going on with point of sale systems these days, the expense is completely justified," Zaichkowsky said.

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Target has reported that the attack on its POS system has cost it $30 million so far, and experts believe that number will grow much higher.

Other major retailers have also reported major computer break-ins recently. They include luxury retailer Neiman Marcus Group, restaurant chain P.F. Chang's China Bistro and Goodwill industries International thrift stores.

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