Hispanic consumers are spending less this year and the retail industry is concerned.
“The Hispanic consumer in the U.S. is shopping much less,” Target CEO Brian Cornell said during the Fortune Brainstorm Tech conference in July. “Particularly among border towns in the U.S., you’re seeing a change in behavior.”
Why is this important?
Hispanics make up 18% of the U.S. population (about 57 million people) and their buying power ($1.3 trillion in 2015 according to Nielsen) is growing faster than the rest of the country. Retail experts, economists and business leaders believe the administration’s stance on undocumented immigrants is causing anxiety in the Latino community.
Millions of immigrants are staying home and not shopping out of fear,” according to Robert Kaplan, president and CEO of the Federal Reserve Bank in Dallas, Texas.
Hispanic business leaders added, “Many Hispanic consumers are saving money in case something happens to them or their loved ones in any crackdown on immigrants.”
“There’s concern about going out in an environment where you could be deported,” noted NPD analyst Marshal Cohen. NPD Group is a market research company that covers 20 industries and interviews 12 million consumers a year.
NPD found that purchases (by Hispanics) at certain retailers have fallen 8 percent in 2017. NPD sports industry analyst Matt Powell says that the purchasing slowdown is disproportionately impacting the sportswear market. The category hit hardest has been shoe chains, followed by sporting goods; however, no channel has been immune to the slowdown.