A surge in shoplifting pushed retail crime losses to £511m ($840m) in 2012-13, the British Retail Consortium said.
The average value of in-store theft rose 62% to £177, according to the BRC's latest retail crime survey.
Losses were 166% higher than five years ago, the BRC said, despite retailers spending an average of £2m each on crime prevention measures.
Helen Dickinson, BRC director general, said UK retailers were "fighting a rising tide of theft in store".
"Far from being victimless, we all pay for this increased stealing through higher prices and, increasingly, shop closures and damage to town centres," she said, "as safety is reduced and communities are blighted."
The BRC believes retailers "need help and support" and has called for police and crime commissioners to develop dedicated business crime strategies to help combat the growing problem.
Thieves typically target electrical goods, designer clothing, handbags and power tools, the BRC said, while organised gangs are prepared to travel further to achieve their aims.
Last year also saw a "dramatic increase" in fraud and online crime, with 80% of retailers reporting a rise, including increased threats from cyber-attacks, the survey found.
Among 30 retailers, who represent 51% of the retail sector by turnover, there were 631,391 incidents of customer theft in 2012-13, the highest level recorded in the survey for nine years.
But just 9% of these crimes were reported to the police, a drop from 12% the previous year, the BRC said.
"This is an indication of the lack of confidence businesses have in the police response to customer theft," the report said.
There was an erroneous perception that shoplifting was a "victimless" crime and, as a result, not taken seriously, the BRC concluded.