A rule requiring face coverings to be worn in all shops could drive people "into the arms of Amazon" and threaten the recovery of the retail sector.
Health Minister Robin Swann is expected to propose making them compulsory in shops here.
Chief Medical Officer Michael McBride also backs the idea.
But Glyn Roberts of Retail NI, and former Finance Minister Simon Hamilton, now head of Belfast Chamber of Commerce, have serious concerns.
In a joint statement they said they had told Stormont of concerns over face coverings, "that their mandatory wearing could adversely affect trade and generate serious issues around enforcement".
Mr Roberts said it would be unfair if shop staff had the pressure of enforcing the wearing of the coverings.
He said: "There are people who wouldn't want to wear them or would feel uncomfortable in one, and there are certain parts of the retail sector where it would be off-putting. In addition, Northern Ireland has been in a better place than the rest of the island and much of the rest of the UK when it comes to infections and the number of deaths from Covid-19."
He warned that the recovery of the retail sector was "very fragile".
"Sadly, we're going to see the situation get worse before it gets better so we're in for some very challenging times in the next weeks or months," he added.
He said a greater use of online retailer Amazon had been expected during the pandemic, but added that independent retailers had also stepped in to cover home deliveries to housebound customers.
And he said that while he and Mr Hamilton did not dispute the scientific evidence of the benefits of wearing face coverings, some members of the public might find them uncomfortable, giving consumers a further reason to shop online.
He said the Executive needed to be "sensitive" in how it handles any campaign around the wearing of face coverings, which are already mandatory on public transport.
"If they go too hard and heavy at this stage, it could threaten our very fragile high street recovery, and drive people into the arms of Amazon and doing more online shopping, and that's the very very last thing we need at this stage," he said.
The Executive Office said face coverings were "strongly recommended" indoors where social distancing may be difficult. "The Executive keeps the issue of face coverings under continuous review and any changes to the advice will be communicated to the public," it said.
There was no confirmation of whether Mr Swann's proposal will be considered this week.Major retailers including Sainsbury's, Tesco, Asda and Lidl did not respond when asked whether they approved of compulsory face coverings.
A spokeswoman for Musgrave, which operates Centra, SuperValu and Mace stores, said: "If there is an update regarding advice on face coverings, our stores will implement accordingly."