[BreachExchange] Hacked almost three weeks ago, The Beer Store can’t track inventory and some outlets still only accept cash

[Destry Winant]

https://www.thestar.com/business/2020/04/13/the-beer-store-struggling-with-attack-by-hackers.html

Almost three weeks after a virus unleashed by hackers tore through its
computer systems, The Beer Store is still struggling to get back to
normal.

Some stores can still only accept cash, an online inventory system is
still down and breweries are calling stores one by one to see if they
need deliveries. Online ordering for customers is still unavailable
and for more than 10 days, breweries weren’t even getting paid for the
beer they delivered to TBS.

It has left breweries frustrated, customers and staff worried about
handling cash, and retail experts puzzled that it would take so long
to fix a systems problem.

“After we got the initial email telling us about the virus, I don’t
think anyone thought we’d still be dealing with this three weeks
later,” said Todd Lewin, president of Muskoka Brewery.

TBS spokesperson Bill Walker said the company is still repairing the damage.

“We have the best experts working on it and we have kept all of our
stakeholders up to date on what’s happening,” said Walker in an email
to the Star.

Late Monday afternoon, Walker emailed the Star to say all but 16 TBS
stores were finally able to accept credit and debit cards again,
thanks to new point of sale technology. Those 16 “remote” locations
will be able to accept credit and debit by the end of the week.

“We apologize for any inconvenience this may have caused our
customers,” Walker said.


Three different industry sources told the Star that part of what’s
taken so long is that hard drives from computers at every single TBS
store have to be removed to make sure the virus doesn’t reproduce the
second the system is brought back online.

Muskoka Brewery, like other breweries who deal with TBS and its
warehouse, usually gets an inventory email a few times a week
regarding how much of each product is needed. Now, the breweries have
to call each of TBS’s 450 locations and ask what they need.

“We’re flying blind, because we don’t really know what our inventory
levels are like at their warehouse,” said Lewin.

The systems problems, caused by what industry insiders say was a
ransomware attack, also hit TBS’s system which allows it to pay
brewers daily for the inventory.

“We finally got a cheque last week, but there was about 10 days where
we got nothing. And that was at a time when most restaurants and bars
were closed except for takeout, so we weren’t selling draft. It was
not ideal timing,” said Lewin, adding he feels some sympathy for The
Beer Store, too.

“I know they’ve been trying hard to get things up and running. But
this is a time when people are buying bigger amounts. A couple of 2-4s
instead of a six-pack. So The Beer Store was finally starting to see a
bit of an upswing, and then this hits,” said Lewin.

If there’s been a silver lining, it’s that home delivery for some
breweries has been getting a boost, whether because of TBS’s woes or
people just not wanting to go out, it’s hard to tell.

“Home delivery’s really taken off. We’re doing 300 or 400 orders a
day. And people are getting two cases, where ordinarily they might
only get one if they come into our retail store,” said Troy Burtch,
marketing and communications manager for Etobicoke’s Great Lakes
Brewery.

Paying cash proved frustrating for customers who had to think about
the risk of getting COVID-19 from possibly contaminated money.
Customer Charles Robinson also noted the extra cost of using a bank
machine to access cash.

“This is totally unacceptable. I had to find a bank machine and pay an
extra $5 fee to get cash to buy a case of beer,” said Robinson.


One worker at a downtown TBS location said the increased risk of
catching COVID-19 from handling cash was one more bit of stress he
didn’t need.

“I’m dealing with a couple hundred people a day. Being anywhere in
retail is dangerous enough right now, and now we have to deal with
cash? Come on,” said the worker, shaking his head in disgust.

Veteran retail analyst Lisa Hutcheson said that while there are
attempted hacks on retailers’ computer systems fairly regularly, it’s
surprising to see TBS struggling to deal with this one for so long.

“Three weeks is a really surprising amount of time for systems to be
down,” said Hutcheson, managing partner at retail consultancy J.C.
Williams Group.

“In retail, knowing what product to have where and in what quantities
is the secret sauce. Not having exact visibility over your inventory
is really tough,” Hutcheson said.

And the idea of handling cash possibly scared some customers off.

“This is not a time when people want to be buying things with cash,”
Hutcheson said.

The hack is only the latest trouble for TBS, which once accounted for
90 per cent of all beer sold in Ontario but has seen its share slip to
63 per cent, as governments opened up sales to grocery stores and
soon, corner stores.

Earlier this year, TBS told its owners there was an “unexpected”
$13.1-million cash flow shortfall in 2019.

Molson Coors and Labatt each own roughly half of TBS, with Sleeman
Breweries owning a small percentage. In 2016 under pressure from the
provincial government, TBS offered independent craft breweries
“ownership” stakes without financial obligations, as well as a place
on the board.