The second national lockdown in England is expected to cost non-essential retail outlets £6.8bn, according to research from Retail Economics.
The new restrictions, which will come into effect from Thursday and last until at least Dec 2, will hammer the industry as it moves into the key Christmas period, the consumer insights company said.
To compound matters, pent-up demand in December could leave shoppers queuing for hours when stores reopen.
Nicholas Found, a senior consultant at Retail Economics, said: "With Christmas around the corner, this couldn’t have come at a worse time for retailers.
"While some consumers will choose to hold off spending this month, pent-up demand in December could leave shoppers grappling queues both on and offline given social distancing in warehouses, delivery capacity and restrictions on shopper numbers in store."
The shutdown is expected to boost online sales by £2.9bn compared to last November, Retail Economics said, but is likely to benefit established "pure online" retailers and those with strong multichannel propositions. Independent high street retailers are expected to be hardest hit.
Mr Found added: "Lockdown measures have ensured it will be a digital Christmas and Black Friday will become even more important this year are shoppers bring forward festive purchases during this extended event.
"But capacity will be stretched to the limit as a new wave of online shoppers purchase gifts online that they previously would only have ever considered buying in-store."
It comes after two high street bellwethers, Marks & Spencer and Primark, issued gloomy updates this week.