When big chains are hacked, mom & pops cash in

A customer leaves a Costco store in Richmond, Calif.
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A customer leaves a Costco store in Richmond, Calif.

A recent cyberattack that compromised a photo service used by big retailers like Costco, Walmart and CVS has forced some of those chains to shut down their photo processing services for weeks. And that has been a gift to rival mom-and-pop services.

Fred Mendoza, manager at One Hour Photo Center & Studio in Sherman Oaks, California, said his store has seen a 15 percent sales increase following the major photo center hacks, which started last month. "We get new customers every day as a result of this hack," he told CNBC.

"I think with all these big box retailers having trouble, customers are starting to trust and rely more on a small mom and pop," Mendoza said, adding that customers have found his business mostly through Google and Yelp.

Dunwoody Photo in Georgia has also seen a 10 to 15 percent increase over the last couple weeks, store manager Michael Beattie said. "We have a Costco up the street that customers usually go to and [they] have been coming in here."

CVS told CNBC it shut down its online photo services on July 17 after it learned information collected by an independent vendor had been compromised. CVS says it's working diligently to resume service as soon as possible.

Walmart told CNBC it still investigating a compromise of customer credit card data involving Walmart Canada's Photo center website. Costco did not reply a request for comment.

PNI Digital Media, the third party photo vendor, confirmed it was hacked but did not say what was taken or when it expects to be back up. The Canadian company told CNBC it is using an outside security expert to assist in the investigation. Meanwhile, the smaller stores that CNBC spoke with said they don't use PNI.

Mendoza admits his store prices are almost double what Costco charges, but he often pushes the idea that he provides better quality and spends more time on services. "We hear the feedback that they cost more, but there is nowhere else to go," he said.