The German discount supermarket chain Lidl has been accused of spying on its employees, including recording how many times they went to the toilet as well as details about their love lives, personal finances and menstrual cycles.

An investigation by the German news magazine Stern uncovered an extensive espionage system in its shops across Germany. It obtained hundreds of pages of documents gathered by detectives allegedly employed by the chain to find out about its staff. The surveillance took place via mini-video cameras installed by detectives. The official reason given to store managers was to reduce shoplifting.

Critics have accused Lidl of using "Stasi methods", referring to the secret police of the former communist East German state who kept track of the most banal and intimate details of hundreds of thousands of citizens' lives.

The detectives' records include details of precisely where employees had tattoos as well as information about their friends. "Her circle of friends consists mainly of drug addicts," reads one record. The detectives also had the task of identifying which employees appeared to be "incapable" or "introverted and naive".

While most incidents seem to have occurred in Germany, the most shocking one allegedly occurred at a Lidl store in the Czech Republic, where a female worker was forbidden to go to the toilet during working hours. An internal memorandum, which is now the centre of a court case in the republic, allegedly advised staff that "female workers who have their periods may go to the toilet now and again, but to enjoy this privilege they should wear a visible headband".

Recording how a German employee identified as Frau M spent her break, one report read: "Frau M wanted to make a call with her mobile phone at 14.05 ... She received the recorded message that she only had 85 cents left on her prepaid mobile. She managed to reach a friend with whom she would like to cook this evening, but on condition that her wage had been paid into her bank, because she would otherwise not have enough money to go shopping."

A Hamburg labour lawyer, Klaus Müller-Knapp, said the transcripts were "scandalous to the highest degree" and breached laws on freedom of expression.

Human rights groups and trade unions pledged to take up the case.

While denying any knowledge of the Czech case, Lidl, which has more than 7,500 stores in 24 countries, including Britain, confirmed that surveillance had taken place in Germany. It said the purpose was "not to monitor staff, but to establish possible abnormal behaviour".

It added that in retrospect the company distanced itself from the transcripts. "The references and observations are not in keeping ... with our understanding of how people should treat each other."