Tasmanian retail sales are forecast to drop despite the economic recovery from the coronavirus crash.
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Retail sales surged in the early months of the crisis.
Forecaster Deloitte Access Economics is tipping overall Tasmanian retail turnover will grow by 8.3 per cent in the current financial year, ahead of national growth of 5.9 per cent.
However, it expects a very different story in coming years, forecasting a 1.3 per cent drop in Tasmanian turnover in 2021-22 and a further 0.3 per cent decline in the following year before a return to modest growth.
Deloitte believes the broader economic recovery will provide challenges for retail.
"Unfortunately for many retailers in 2021, the economic recovery and re-opening of industries will more likely be a headwind than a boon," Deloitte Access Economics partner and principal Retail Forecasts report author David Rumbens said.
"This means more opportunities for non-retail spending, and an increasing shift back towards travel and hospitality over the year.
"A return to 'normal' also poses a bigger risk to some retailers who have picked up their share of wallet over the past year.
"This includes household goods retailing, where the durability and one-off nature of the purchase increases the risk of a sharper pull back in spending."
Deloitte said retail's ability to stay open to trade was a big driver of its strong 2020 performance.
"Households benefited from substantial fiscal stimulus payments and, with limited options available to spend this income on, a large chunk of income was shifted to savings," it said.
"But, with many retailers still able to operate and online providing a key channel to consumers, retail goods were an appealing buy to consumers stuck at home.
"The fiscal stimulus tap has been turned down to a drip, meaning less money for households to spend.
"Luckily, they are more likely to feel like spending it, given the good news on vaccines and limited restrictions across activities.
"Unfortunately for retailers, this also means more opportunities for non-retail spending shifting back towards travel and hospitality over 2021."
Deloitte forecast Tasmanian retail turnover would increase by 0.5 per cent in 2023-24 and 1.5 per cent in the following financial year.