Internet sales boom hits island state hard

Tasmanian business is bracing itself for online sales to hit the island state harder than other parts of Australia in the lead-up to Christmas.

The state's isolation has retailers concerned that the internet shopping boom will carve a hole in their crucial December sales figures.

Tasmania's retail sector enjoyed six months of growth to October but Mark Bowles, economist with the state's Chamber of Commerce and Industry, says those spending habits could be diverted to online Christmas shopping.

"There's still a bit of nervousness and that's reflected in the business confidence index," he told AAP.

"We've just had an interest-rate cut which should boost spending overall.

"Any decline that we get in retail sales this Christmas is much more likely to be due to online competition rather than consumers locking up their wallets."

And even more so because of Bass Strait, he said.

"It's probably worse because we don't have the range or variety of shopping options that are available in larger cities," Bowles said.

"People are probably more attracted to looking online, not even just for the price, but for the range of products that are available."

In recent weeks a gloom has spread over the season to be jolly in Tasmania as politicians argued about whether the state is in recession.

The state government announced big spending cuts earlier in the year, most controversially to health services.

But Bowles said retail in Tasmania turned around in the wake of the budget, after 18 months of going backwards.

"I think we can categorically say that they (the spending cuts) haven't had an effect," he said.

The nervousness of retailers is evident among the stallholders of Hobart's Salamanca Markets, a Christmas shopping mecca.

"Generally speaking the last four years have been declining so, while it's not wild optimism, it's hope," stallholders spokeswoman, Helen Timms, said.

"Coming up to Christmas, of course we would expect better sales but whether it's boom times, I'm not so sure."

The markets are at least resisting the internet threat.

"I'm not so sure that it would affect a retailer selling local content," Timms said.

"At the market it's not such a big problem because a lot of our product is unique ... and it is the whole experience."

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