UK grocer Morrisons says employee arrested over data theft

LONDON, March 17 (Reuters) - Wm Morrison, Britain's No. 4 grocer, said on Monday an employee of the company had been arrested in connection with a major theft of data from its staff payroll system on the same day it issued a huge profit warning.

Morrisons said it was continuing to work with West Yorkshire Police on the investigation.

The Bradford, northern England-based firm had said on Friday it was made aware on Thursday that staff pay data had been published on the internet and sent on a disc to a local newspaper.

Morrisons ensured the data was taken off the website and said it did not believe it had been the victim of an external cyber attack, implying the data was likely leaked by an employee.

The firm has since advised colleagues on the measures it is taking to protect their security and has purchased support from Experian (Other OTC: EXPGF - news) that detects misuse of colleague information and protects against identity fraud.

On Thursday, the grocer posted its lowest annual profit for five years, issued a profit warning and sparked fears of an industry price war after saying it would invest 1 billion pounds ($1.7 billion) in price cuts over three years to win back customers who have switched to discounters.

On the same day Chief Executive Dalton Philips also spoke about how recent investment had transformed the firm's "antiquated systems."