This decision is expected to see a cut in music licence fees paid by retailers and possibly a reimbursement of the increased fees paid since 2005.
Phonographic Performance Ltd (PPL), which administers and collects licence fees, introduced new rates in 2005 which increased background music charges by 200%-400%.
A Copyright Tribunal set up to look at the case of broadcast music found that these increased charges were disproportionate and unfair.
However, Mr Justice Kitchin said that a separate tribunal for recorded music would be "inconvenient, cumbersome, expensive, and involve a waste of judicial and public resources". He ruled that the Copyright Tribunal has powers under the Copyright, Designs and Patents Act 1988 to set the value of both broadcast and non-broadcast music.
"We are delighted that this latest battle has been won," said Association of Convenience Stores chief executive James Lowman. "We will continue to press for a refund for those retailers left out of pocket."
The Copyright Tribunal plans to revisit the issue and determine appropriate charges for music played in shops.