SIOUX FALLS, S.D. (KELO) — The National Retail Federation expects consumers will spend an average $875 on holiday spending this year.
The NRF said holiday spending in the U.S. will increase by 3% to 4% over 2022.
Wallethub said the average budget in Sioux Falls would be $1,151 and $960 in Rapid City. Wallethub ranked 558 cities for holiday shopping. Sioux Falls was ranked 280th. Rapid City was ranked 393rd.
Nathan Sanderson, the executive director of the South Dakota Retailers, said the state’s consumers and retailers are “cautiously optimistic.”
Shoppers will be spending money but there “is a little bit of a shift from wants to needs,” Sanderson said.
The needs holiday list can include “boots, clothes, small kitchen appliances, gift cards to restaurants and even grocery stores,” Sanderson said. “Shoppers also have a desire to give a good experiences.”
The Conference Board has a slightly different take on holiday spending than the NRF. It said U.S. consumer holiday spending will be an average $985, which is less than the reported $1,006 in 2022.
The Conference Board is a group of members from various companies and organizations that provide insight into the economy and other topics.
The two organizations also broke down the average spending to gifts and seasonal items such as food. The Conference Board said an average of $654 will be spent on holiday gifts which is an increase from $613 last year.
The NRF said about $629 will be spent on gifts and $255 will be spent on food, candy and other seasonal items.
The survey from Deloitte, a financial company, predicts for increase in holiday season spending. The survey said consumers plan to spend an average of $1,652 this season.
One prediction on holiday spending was less than Deloitte, NRF, and The Conference Board.
A survey by accenture said consumers planned to spend $591 on average.
The holiday season remains a critical part of the annual retail revenue.
“The fourth quarter (of the year)…is the World Series, the Super Bowl…,” Sanderson said of its importance to the retailer.
Inflation will play a role in holiday spending in terms of of higher prices and curbing some spending, analysts said.
Deloitte said consumers have planned to spend more money because of the higher prices.
While multiple reports don’t predict big declines in holiday shopping budgets, consumers may be buying fewer gifts than in prior years because of increased prices.
An October NerdWallet report said surveyed consumers said they planned to buy fewer items this year. Seventy-five percent of those surveyed said they plan to put gifts on a credit card.
Credit card debt is increasing nationally, including in South Dakota.
Sanderson said inflation and credit card debt have a role in holiday shopping. Still, 2023 so far has been a better year than what many retailers anticipated, he said. Overall, retailers aren’t expecting a “gangbusters” type of holiday shopping season but it should be really solid, Sanderson said.
One big change from 2022 and other COVID pandemic years is there a few shortages of products, Sanderson said.
Shoppers will find well-supplied stores, he said.
That also means that retailers may be able to offer more specific holiday shopping events, Sanderson said.
The Deloitte report said shoppers plan to “pounce” on promotional events this year.