The Association of Convenience Stores has called for an overhaul of business rates increases after the results of its latest survey revealed the destructive impact that unpredictable rate hikes are having on local shops.

The quarterly Voice of Local Shops survey, which tracks the sales and confidence of small stores, has shown that the impending increase in business rates is more of a concern now than it has been at any point since the start of 2012. Forty five per cent of retailers in the last survey cited business rates as a major obstacle to success for their store – more than those concerned about crime, taxation and obtaining finance combined.

ACS chief executive James Lowman said: “If the Government wants to have a long-term positive impact on small businesses across the UK, they must cap the rates increase at 2% - bringing it in line with the council tax cap and the Government’s own targets for inflation. Allowing these unpredictable hikes to continue will send a clear message that the Chancellor has failed to recognise the importance of the retail economy.”

When asked what they most wanted from the Chancellor’s Budget, convenience store retailers called for a reduction in the annual business rates increase, but also for action to reduce the level of VAT, currently set at 20%.

The survey also revealed that 47% of stores have seen a decrease in profits over the last quarter, with 32% claiming that they have had to cut the number of staff hours in their business.