High street sales fell for the fifth month in a row in June, according to a survey that suggested bricks and mortar retailers have endured the worst first half year of trading in more than a decade.

UK high street sales fell 1.7% year-on-year in June, the fifth consecutive month of falling sales, according to data released by advisory firm BDO, which bases its finding on a survey of mostly medium-sized retail businesses. It is the first time in at least 12 years that in-store growth had not topped 1% in a single month for the first half of a calendar year.

Sophie Michael, the head of retail and wholesale at BDO, said: “The bleak and crippling start to the year shows no sign of abating, with deep discounting set to eat into [profit] margins that are already being stretched paper-thin by poor sales and rising costs, including the much discussed issue of unfair business rates on high street retailers.”

MPs and retail bosses have called on the government to rethink business rates as rising costs, a shift to online shopping and low consumer confidence have already led to a series of high street failures with well established chains including House of Fraser, New Look, Marks & Spencer and Carpetright all closing dozens of shops.



Business leaders say rates, the tax levied on the value of a commercial property, unfairly discriminate in favour of online specialists such as Amazon, Asos and Ocado.

But the chancellor warned in a letter published on Friday there would be no quick relief on business rates. In response to a letter from Nicky Morgan, who chairs parliament’s Treasury committee, Philip Hammond said there was no consensus on an alternative to rates and many of the ideas proffered “were not without their own issues”.

Hammond said the government had undertaken a fundamental review of business rates in 2016 after which it decided to keep business rates as a property tax. “Respondents to the review agreed that property based taxes were easy to collect, difficult to avoid, relatively stable compared to other taxes and had a clear link to local authority spending.”

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Referring to competition from the likes of Amazon, which is being addressed by a government consultation on taxation of digital firms, Hammond said: “I have been clear that we need to find a better way of taxing the digital economy and we are making progress on this issue.” But he said further consideration of a new digital tax was needed before considering any changes to business rates.

Morgan said: “It’s clear that many bricks and mortar stores are struggling to remain competitive against online retailers, with the chancellor admitting that business rates can represent a high fixed cost for some businesses.”

