Shoplifting has risen 70% since the year 2000 despite billions spent on security, research suggests.
The report said shoplifting was causing some stores to close down
Thieves steal an average of £149 worth of goods in each incident, the British Retail Consortium (BRC) 2006 Retail Crime Survey said.
It estimated that shop crime in the UK in 2005 cost a total of £2.1bn.
The report said shoplifting was to blame for almost two-thirds of violent incidents in stores and had forced some shops to close.
Since 2000, shoplifting has cost Britain's retailers £13.26bn, which included £4bn spent on crime prevention, the report said.
The total cost of shop crime in 2005 was down 1.3% on the previous year, and represented 0.86% of business turnover compared with 0.88% in 2004.
BRC director general Kevin Hawkins said: "The huge increase in the number of shoplifting incidents is extremely worrying.
"It is having a very serious financial impact and is putting the safety and wellbeing of staff and customers at risk."
The BRC said "soft" penalties for shoplifting and lack of enforcement was partly to blame for soaring shoplifting rates.
It said it wanted the government to continue having prison as an option for punishing shoplifters.
Mr Hawkins added: "The penalties are perceived by potential shoplifters to be very light indeed.
'No effective deterrent'
"The chances of being prosecuted and ending up in court are very remote. "One of the great problems facing retailers is that a lot of shoplifters are repeat offenders - they keep coming back and doing the same thing, because they perceive that there is no effective deterrent."
The report also said the rising rates of shoplifting is behind many violent incidents in shops in the UK.
It blamed shoplifting on 60% of the attacks on staff in British stores.
The report also said smaller and medium-sized stories were less able to spend money on security, and 15% of them had been forced to close because of shoplifting.