Sophos: Retail Ransomware Encryption Rates Rising Despite Faster Recovery - Security Info Watch
Ransomware attacks against retail organizations resulted in data encryption in 62% of cases in 2026, up from 48% the previous year, according to Sophos' sixth annual State of Ransomware in Retail report.
The findings are based on responses from 217 IT and cybersecurity leaders at retail organizations that experienced ransomware attacks during the preceding 12 months. The survey was conducted between January and March 2026. Despite higher encryption rates, retailers reported faster recovery times and smaller ransom payments.
The average cost of recovering from an attack increased to $1.76 million, compared with $1.65 million in 2025. This increase in costs comes as encryption rates continue to climb, reversing two consecutive years of declines.
Phishing leads technical causes
Phishing was the most frequently reported technical root cause of ransomware attacks against retailers, accounting for 29% of incidents. Exploited vulnerabilities followed at 26%, while malicious email accounted for 22%. Retail recorded the highest rate of attacks originating from exploited vulnerabilities among all sectors surveyed.
Identity-based attack methods, including phishing, malicious email, compromised credentials and brute-force attacks, collectively accounted for 69% of ransomware incidents involving retailers.
Data encryption and theft increase
The percentage of retail ransomware attacks resulting in data encryption increased by 14 percentage points from 2025. Incidents involving both data encryption and theft also increased, rising from 14% in 2025 to 19% in 2026.
Retail organizations increasingly relied on backups to restore encrypted information. The report found that 71% recovered data using backups, compared with 62% the previous year and 66% across all sectors. Known security gaps were the most frequently cited operational cause of ransomware incidents.
Ransom payments remain below other sectors
The median ransom demand received by retail organizations was $225,000, the second lowest among surveyed sectors and substantially below the $698,000 cross-sector median. However, the average ransom demand in retail reached $4.32 million, the highest among all sectors.
The median ransom payment made by retail organizations was $57,500, the lowest of any sector and below the $769,000 cross-sector median. Despite these lower payments, recovery expenses continued to rise.
Recovery times improve as costs rise
The average time required to fully recover from a ransomware attack declined from 3.16 weeks in 2025 to 2.54 weeks in 2026, below the 2.80-week average across all sectors. More than half of retail respondents, 56%, reported recovering within one week, the highest percentage recorded in five years of retail survey data.
Among retail organizations affected by credential-based attacks, 97% had multifactor authentication enabled. Nevertheless, more than half experienced data encryption. Firewalls identified 59% of attacks before ransomware deployment, but attackers successfully encrypted data in 60% of the incidents.
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