The BRC's monthly Retail Sales Monitor, to be published on January 10, will show that despite heavy discounting in the run-up to Christmas, the total value of sales is barely up on December 2010.
If November's consumer prices inflation of 4.8% is stripped out of that number, it would mean that sales fell in real terms as fewer goods were shifted, the BRC added.
"We are not very optimistic that growth will be significant, and if you include inflation it will almost certainly be down on last year," a BRC spokeswoman told The Guardian. "Last December was badly affected by the snow so there was even more reason to hope this December would look good by comparison. However, Christmas shopping started very late this year and there was a remarkably high level of discounting in advance of Christmas itself."
Consumer caution has toppled a number of high street names, with lingerie chain La Senza announcing the closure of 80 of its stores at the weekend and administrators at footwear chain Barratts Priceless made 1,610 employees redundant on Friday after it failed to find a buyer for its concessions business.
Fashion retailer D2 jeans also folded last week, as did toy and gift chain Hawkin's Bazaar.
Outdoor clothing retailer Blacks Leisure is expected to enter administration soon.
Other retailers are expected to go to the wall, according to BRC director general Stephen Robertson.
He said conditions were worse than at the end of 2008, acknowledged to be the worst period in a generation for the high street.
"This feels, talking to retailers, that there is more pressure than back in 2008,” he told The Daily Telegraph. “Then there had been a relatively good run up until that point. Sales were down, but margins were holding up.
This time, it's not just about the poor sales performance it's about the underlying profitability. We've seen a blizzard of deals and promotions, so gross profit margins will have been squeezed to extinction."
Retailers were so concerned about the lack of spending this December that two-thirds of them were putting up the sale signs 10 days before Christmas, according to PricewaterhouseCoopers.
The research firm Verdict predicts that retail sales will grow by just 1.2% during 2012, up £3.5bn to a total of £295.3bn. It means that 2012 will be the third weakest retail year in four decades, only beating 2009 and 2011.
There has been evidence that heavy promotions tempted consumers online and away from the high street, according to a survey by market researcher Experian.
But numbers of shoppers visiting the sales on Boxing Day, the key post-Christmas sales day for the UK retail sector, were similar to 2009.
Footfall in stores was up 21.5% compared with the same date in 2010 but that figure was flattered by Boxing Day falling on a Sunday last year, when shops have limited opening hours.
The Centre for Retail Research has calculated 7,485 retail jobs are at risk at the start of this year because of the number of firms already in trouble.
And, according to the KPMG/Synovate Retail Think Tank, the new year will fail to bring a rosier outlook for retailers. It believes cautious consumer behaviour and bargain-hunting that have become endemic in the run-up to Christmas will continue throughout the year.
· La Senza, owned by private equity group Lion Capital, is poised to confirm the appointment of KPMG after announcing before Christmas its intention to go into administration. Sources close to Lion Capital told the Daily Mail it was unlikely to recoup its investment in the business, despite owning both La Senza's equity and its secured debt. Interest repayments due to Lion will be triggered as soon as the company goes into administration and any money owed to the buyout house will be prioritised ahead of that owed to La Senza's landlords and its suppliers. The chain's huge debt has put off potential buyers, including Theo Paphitis, who sold the business to Lion for £100m in 2006. La Senza is to close 80 of its 146 stores, threatening some 2,600 jobs.
· Administrators of Barratts Priceless have failed to find a buyer for the UK shoe chain. Insolvency practitioners Deloitte announced on Friday that more than 1,600 jobs had been axed at the company. "Following a marketing of the Barratts Priceless businesses it is clear that a satisfactory sale of the concession to a new party will not be achieved," said Deloitte, although it still hopes to find a buyer. Barratts Priceless went bust at the start of December. It operates 191 shops and ran almost 400 concessions in other stores, the vast majority in the Dorothy Perkins chain.
