June 18, 2025

Consumer spending this spring in Sioux Falls held steady in some categories and got a little stronger in others, according to the city’s most recent financial report.

Sales tax revenue was up 1.8 percent in May compared with the same time last year, which largely represents April sales.

That leaves the city with a 1 percent overall growth through the first five months of the year.

“That compares to 1.5 percent where we ended the year, and this time last year we were at 3 percent,” director of finance Shawn Pritchett told the City Council on Tuesday.

“We’ll continue to monitor this as we get into the remainder of this quarter and the last two quarters of the year.”

By sector, sales continue to show “weakness across the board, both on the business and consumer side,” Pritchett said.

Wholesale trade was up 6 percent, “so that was positive to see,” he said, while lumber and manufacturing continue to trend down.

Grocery sales, which had been flat, were up 5 percent. Department stores, which constitute the largest sector of sales tax, were up 5 percent, while remote retail showed the largest growth at 16 percent.

The entertainment tax rebounded a bit in May, up 3.8 percent over the same time last year.

“This again is driven by restaurants — they grew about 3 percent last month — lodging came in a little stronger at 5 percent, but drinking establishments were flat.”

For the year, the entertainment tax is down 1.5 percent, but a “fairly significant” correction that was done by the state a couple of months ago is “really throwing that number off,” Pritchett said.

The lodging tax essentially is flat for the year, he said.

Inflation took a little uptick to 2.4 percent in May from 2.3 percent in April “but (is) still pretty steady,” Pritchett said. “Those are the lowest that it’s been since March of 2021 so still hovering right there in the right direction.”