Forget the lure of e-commerce or the doldrums induced by lackluster assortments, retailers now have an additional challenge.
Recent reports indicate that Hispanics are spending less because they’re preoccupied with heightened immigration concerns.
Immigration was a leading topic throughout Donald Trump’s presidential campaign. And while the White House had been saying little about it recently, immigration related arrests have reportedly been up 43 percent since late January. And the topic is back in the headlines after Trump’s speech in Phoenix this week. During a campaign-style rally, he threatened to “close down our government” in order to fund the wall between the U.S. and Mexico built.
In light of this atmosphere, NPD found spending by Hispanics has fallen by 8 percent this year. And apparel and footwear—two categories in which Hispanics typically spend—are among those feeling the effects. NPD analyst Matt Powell told Bloomberg sneaker sales have dropped in the high teens, citing brands like Vans, Nike and Skechers among the hardest hit.
It’s an extra impediment the retail sector can ill afford right now, especially in light of the fact that Hispanics are one of the fastest growing groups in the country. Nielsen reports there are 57 million Hispanics in the U.S., making up more than 18 percent of the country’s population. Moreover, 50 percent of the U.S. population growth came from Hispanics from 2010 to 2015.
According to the Selig Center for Economic Growth, Hispanics boosted the U.S. economy by $1.4 trillion in 2016. That’s more than the GDP of Spain.
“Their buying power is undeniable, as is their influence on everything from fashion and food to music and entertainment,” Target CEO Brian Cornell is quoted at a technology event in Aspen, Colorado, last month. He added the shopping behavior among Hispanics is changing, as they opt to stay home and go out less, especially around border towns.
And these fears aren’t just keeping them from stores, in some cases, it’s depressing their earning capabilities as well. “It’s very common to have a Mexican married to an American, but if that Mexican is undocumented, he’s really afraid of going out and looking for work,” Luis Fitch, founder of Uno Branding, told Reuters. “And if only one person is working, obviously their budget is cut in half and that’s a problem if they were going to buy a house or car this year.”
Linda Lane Gonzalez, chairwoman of the Association of Hispanic Advertising Agencies, has another theory as to why Hispanics are opting not to shop. “I don’t think they’re expecting to go to Target or Foot Locker store and be deported,” Gonzalez told NBC News. “They may be holding back on spending to put something aside in case someone they know, a friend or family member, is in need.”