SIOUX FALLS, S.D. (KELO) — Holiday retails sales are expected to be 8.5% better than in 2020, according Mastercard Spending Pulse.

But sales may even be better in South Dakota.

“Early indications are holiday retail sales will be up by more than 10% in 2021,” said Nathan Sanderson, the executive director of the South Dakota Retailers Association. The increase could be about 10.7%.

Sanderson said there are three reasons for the increase. Inflation, consumers spending unused vacation money on holiday shopping and the trend toward buying more higher quality items.

Inflation is the main reason for increased retail sales revenue, Sanderson said, but that doesn’t account for the full share of increased sales.

Consumers that had planned trips did not take them in the second year of the COVID-19 pandemic, Sanderson said. Instead they spent at least some of that money on holiday gifts for friends and family, Sanderson said.

Higher quality items may have a higher initial cost but a longer lasting value, he said.

“Often these are locally made items or made in the United States items,” Sanderson said.

It’s the difference between buying a $20 blender versus an $80 model made in America, Sanderson said.

Mitchell example of big and local

Jen Bradley, the director of tourism and marketing for Mitchell said the city’s businesses are seeing the results of a shift toward buying more locally.

The past two years it “has hit home that shopping local means a lot,” Bradley said.

Although firm numbers aren’t yet in for Mitchell’s holiday retail sales, “we can’t wait to see the final sales tax numbers,” Bradley said. “We had a strong October and November.”

Numbers have been higher than 2019, a more typical shopping year, Bradley said.

“That’s encouraging,” Bradley said.

Sanderson said Mitchell is an example of the blend between national stores and locally owned stores. For example, Cabela’s built on the south side of Mitchell in what was once a field. Walmart built there and now, there are also locally owned retailers, Sanderson said.

“A good mix of larger big box stores and smaller, locally-owned retailers, is a healthy thing,” Sanderson said.

Bradley said the city has benefitted from the larger retailers and its locally owned businesses.

“Mitchell has turned into a hub. Not just a medical hub but a shopping hub (too),” Bradley said.

Retailers, including the grocery stores draw from a 40 to 50 mile radius of the city, she said.

Sanderson said the holiday shopping season won’t end for several days. Detailed numbers on sales should be available in the next several weeks.

The National Retail Federation predicted in October that sales would 11.5% higher than in 2020.

Learning for next year

Sanderson said shipping issues caused some disruption in inventory for businesses this holiday season.

Business owners will be evaluating their inventory space and even items that may be the hot sales for 2022 early in the next year, he said.

The things learned from the challenges this year will be helpful in 2022, Sanderson said.