Retailers are being plundered by their employees, according to a new report by the Centre for Retail Research.

The study claims the UK is one of the worst countries in Europe for stealing by employees, costing employers around £1.5bn last year. It came second behind Iceland in a study of 25 nations.

Despite this, however, overall losses from theft, fraud, damage and error for the UK sector fell by 13 per cent during 2004.

The study of 423 retailers showed most were planning to get tough with internal crime, including more vetting of staff as well as bonuses and incentives to try to head off any threat of theft.

It found that 29 per cent of shrinkage was due to staff stealing from their employers, up from 28 per cent in 2003.

However, Nick James, crime policy officer of the British Retail Consortium, told the BBC most employees were entirely honest.

“It is due to a very small number of dishonest staff who may be stealing for extended periods of time and that may be very hard to detect,” he said.

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