Recent tech outages at major UK retailers Greggs, Sainsbury’s, McDonald’s, and Tesco led to disruptions in March 2024, causing payment processing failures and forcing temporary closures. The Payments Systems Regulator (PSR) has begun investigating these incidents, raising concerns about digital transaction reliability.
The shift towards cashless societies is accelerating, with projections from PwC indicating an 80% increase in global cashless payment volumes by 2025. Real-time payments are expected to constitute nearly 28% of all electronic payments by 2027.
The Challenges Of A Cashless Future
In the UK, debit card transactions surpassed half of all payments in 2022, with contactless payments gaining popularity. Retailers heavily reliant on digital payments face challenges from an unpredictable payment technology, highlighting the need for an agile and authentic crisis communication strategy.
Crisis Comms Wins And Losses
We take a look at how each of the retailers handled their crisis communications in the face of IT outages, with some coping better than others.
The Story Behind The Headlines: McDonald’s
McDonald’s encountered a global IT failure affecting operations including the US, UK, Japan and Australia. The incident gained widespread TV and print media coverage with many speculating a cyber-attack on the restaurant chain. McDonald’s Executive Vice-President and Global CIO, Brian Rice, was quick to share a message with global employees, franchisees and DL partners attributing the issue to a third-party configuration change and not from a cybersecurity breach. This message was reiterated by in market spokespeople which also included an apology to customers for the inconvenience caused.
However, the fall out on social media was huge. Customers angrily posted about the inconvenience with many including photos of closed stores, empty car parks alongside aggressive memes. The UK X account, which is usually very active in responding to online comments, didn’t engage during this time. Social media comms was led by the global X account which shared an update on the issue once resolved.
Comms Takeaway: McDonalds crisis communications plan was led by the Head Office who chose to respond quickly and with authority. The key message came from a senior business leader to the media and stakeholders, and was clear: McDonalds had not fallen victim to a cyber threat. This message trickled down to local markets with in-country spokespeople sharing updates with local outlets when appropriate.
As stores began to reopen, customers quickly returned with many joking that they had had to ‘put up’ with food from rival Burger King. The clear, timely handling of the crisis translated into positive customer feedback as some posted celebratory photos on social media when their local McDonalds reopened and espoused their brand loyalty.
The Story Behind The Headline: Sainsbury’s
On the 16th March, Sainsbury’s encountered difficulties with contactless payments after a software update. The outage hindered the fulfilment of most online grocery deliveries and extended to in-store contactless payments. The company was quick to share an update via X with CEO Simon Roberts following up with a personal email to the affected customers, offering a £5 e-voucher by way of compensation. Roberts also made the decision to have on-the-ground customer communication and stationed Sainsbury’s staff outside some stores to share a message that cash payments only were being accepted.
Comms Takeaway: Although many people were impacted by the outage, Sainsbury’s has been praised for its proactive and authentic approach to crisis comms. A heartfelt and personalised email from the CEO reinforced Sainsbury’s as a credible brand and by offering an e-voucher, many customers felt adequately compensated and returned to stores later that day.
The Story Behind The Headline: Tesco
On the same day, approximately 4,000 Tesco shoppers were affected by an outage that saw online orders abruptly cancelled minutes before delivery and stores unable to take payments at the till. Thousands of customers took to social media and platforms like Downdetector to express their confusion and frustration. A Tesco spokesperson issued an apology online and committed to providing alternative slots to those affected. Tesco assured customers that they had not been charged for their cancelled orders and offered new delivery slots within 24 hours. However, many complained that it was impossible to find a new slot and those who received part of their order were informed that it could take up to five working days for refunds to be processed.
Comms Takeaway: Being the second retailer in a day to experience a tech outage, Tesco found themselves in a very different situation to Sainsbury’s. Tesco prioritised the message that the two incidents were unrelated and focused on praising its IT team for working hard to fix the issue. Tesco quickly confirmed that the issue had been fixed and encouraged customers back to its stores. However, the lack of transparency regarding the root cause of the outage has left a cloud of speculation and the issues with rebooking delivery slots left customers with a long-lasting negative sentiment towards the retailer. It goes to show that crisis communications is more than just a quick response and that messaging must be well considered as well as timely.
The Story Behind The Headline: Greggs
Greggs joined the ranks of major UK businesses grappling with IT disruptions, resulting in store closures nationwide. The Greggs brand is famous for its friendly, witty, cheeky approach in store and online. However, in the face of serious IT issues, the bakery chain balanced humour with sincerity. Demonstrating their trademark wit, a sign in the Ludgate Hill shop read: “Oh Crumbs!” whilst an official statement from a Greggs spokesperson reassured customers and thanked them for their patience. Once the issues had been resolved, the Greggs X account (boasting almost 220K followers) shared a short update and signed off “Bring on the Sausage Rolls”, which was met with over 1.5K likes.
Comms Takeaway: The famous good-humoured and self-deprecating Greggs brand was put to the test during the tech outages. The ramifications for the business were significant, as share prices dropped on the London Stock Exchange. The firm’s market price recovered later that day signalling a return to confidence and with no lasting damage to the brands reputation. Greggs proved the power of authentic communication in the midst of a crisis and saw the impact of brand loyalty as customers quickly returned to stores once the issues had been fixed.
Communication Strategy For A Cashless Future
Recent tech outages underscore the challenges of transitioning to a cashless future. To succeed in this evolving landscape, businesses need to focus on cybersecurity, strong IT infrastructure and effective change management. Most importantly, brands must establish an effective communication strategy, prioristing agility and transparency to maintain trust and mitigate reputational harm.
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