The side effect of the US immigration crackdown: the Latino market with a spending power of $2 trillion shrinks instantly
The tightening of immigration policies in the United States, including the large-scale deportation of illegal immigrants and raids by the Immigration and Customs Enforcement (ICE), has caused panic among the Latino community in the country, leading to changes in their consumption behavior, such as reducing shopping and dining out, and tightening spending due to inflation and unemployment pressure, which has directly impacted large companies that target Latinos as customers.
The annual consumption power of the Latino population is estimated to be $2.1 trillion, but because of the fear of being stopped by immigration officials, regardless of whether they have legal residency, they have reduced their frequency of going out and downgraded their consumption level.
Coca-Cola, which has always regarded Latino consumers as an important source of sales growth, said that its North American sales fell 3% in the first quarter of this year.
JD Sports CEO Schulz, whose main customer base is Latinos, said at an analyst meeting in May that “customer traffic has dropped significantly” and “the impact of immigration policies is obvious.”
According to Kantar’s market research report last month, in the first quarter of this year, the number of Latino customers at Walgreen’s chain drugstores fell by 10.5 percentage points, Home Depot’s fell by 8.7 percentage points, and the discount retailer Dollar General fell by 6.1 percentage points.
Beer producer Constellation Brands’ beer retail sales fell 1% last quarter, the first decline since it acquired the licenses for brands such as Modelo (half of its US customers are Latino), Corona (30% of its sales are Latino) and Pacifico in 2013. Boston Beer attributed the slowdown in sales growth of its main product Twisted Tea cocktails in part to fewer Latino purchases.
In addition, restaurant chains such as Wingstop and El Pollo Loco told investors that the decline in Latino consumption has hit sales.
