Despite the fact that unwanted exposure of consumer data has become a hot-button issue in the media and among legislators nationwide, experts admit that it remains unclear just how much damage the events will cause to the finances and reputations of companies that experience major incidents.
In the case of TJX Companies -- which admitted a massive data loss in early 2007 involving the personally-identifiable information of over 45.6 million individual consumers -- it appears that the discount retail chain's business has not yet absorbed significant interruptions.
On April 12, Framingham, Mass.-based TJX -- which operates retail chains including T.J. Maxx, Marshalls, and HomeGoods -- reported that sales at its stores increased by 6 percent in March 2007, compared to the same timeframe in 2006.
The performance easily outpaced estimates from industry watchers, including Thomson Financial, which had predicted a 4.6 percent gain in sales at TJX for the month.
That latest report follows earlier news that TJX had experienced increased sales growth of 2 percent in Feb. 2007 and boosted sales by 4 percent in Jan. 2007, compared to the same time frames last year.
On Wall Street, TJX shares also appear to be riding out the controversy without major injury as of April 13 with the company's stock trading at roughly $28, compared to just under $30 at the time the breach was initially reported in January.
The continued performance of TJX bucks the findings of some research that contends that businesses experiencing major data incidents will encounter negative pushback from customers and investors.
TJX said in its most recent filing with the SEC (Securities and Exchange Commission) -- issued on Mar. 28 -- that it has already spent $5 million on recovery efforts related to the attack, and company officials indicated that the firm expects to continue to pay for the mistake.
However, the impact of the data breach -- believed to be the largest such event ever reported -- has not yet taken the sizeable bite out of the retailers' in-store traffic or pocketbook that some reports have predicted it might.
According to a report published this week by Javelin Strategy & Research, a recent survey it conducted of more than 1,200 consumers found that 77 percent said they would discontinue shopping at merchants who suffered major data breaches. Some 85 percent of respondents said they would prefer to reward companies who avoid major incidents by giving them more of their business.
Mary Monahan, the Javelin analyst who authored the report, admitted that the TJX scenario points to discrepancies between what consumers are saying publicly and the statements they appear to be making with their spending habits.
"It's true the impact doesn't appear to be there yet. Consumers are promising to punish merchants who are lax with security on one hand, but it appears that they can't deliver on those promises because they can't differentiate who it is that's doing a better job of protecting their data," Monahan said.
Business and security analysts, along with lawmakers and privacy watchdogs are generating a good deal of publicity, the analyst said, but the issue has not permeated most consumers' worlds to the extent that it has changed their buying patterns.