The Journal. - Why Latino Consumers Are Spending Less

Episode Date: June 18, 2025

Deportation fears and economic uncertainty is driving changes in shopping behavior in Latino communities. Job losses in industries like construction have also left Hispanics with less money to spend. WSJ’s Laura Cooper travels to Texas and reports that some Hispanic shoppers are forgoing their regular shopping trips and restaurant meals. Companies are now saying they’re seeing the pullback in their sales. Jessica Mendoza hosts.  Further Listening: - Inside ICE’s Aggressive Approach to Arresting Migrants  - Deportations Could Upend This Parachute Factory  Sign up for WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

We got some plums and limes, some mangoes. That's our colleague Laura Cooper. She's at a farmers market in Houston. The market is in a predominantly Hispanic neighborhood. Many of its stalls sell goods imported from Mexico, things like herbs and dried chilies, spicy candy for piñatas, and traditional ceramic products.

What do you need? I need to sell the food in moringa. In one of the stalls, Laura met a vendor named Isabel Aguilar. Isabel was helping a customer buy some moringa seeds, which are used to make tea. If you take the pound, I can give you 35, which are used to make tea. Over the last few months, business at our stall hasn't been great. Isabel says she's noticed that her customers are buying less. She says they're

struggling. Some have lost their jobs, others have had their work hours cut, so they're tightening their belts. And another reason customers aren't spending is fear. Fear of deportation. After Immigration and Customs Enforcement, or ICE, ramped up operations in the community in February, Isabel says many customers stopped coming. And Isabel gets it. I think they started with the immigration issue. There were no people. People didn't come.

And Isabel gets it. She doesn't have legal status. And she's been avoiding stores that are rumored to be unfriendly to immigrants, or where she's heard there's a high police presence. I don't take risks. Things have changed in some way. I try not to go to the places that are mentioned so that—

If they don't want us, I respect that too. No way. Isabel says she'd rather not run any risks, and she's changed where and how she shops. Sometimes, she just stays home. Like Isabel, many Latinos are hunkering down, and that lost economic activity is hurting some companies' sales. Here's our colleague Laura Cooper again.

The main thing we learned is that people are scared. They are not spending money. Whether that has to do with concerns about immigration and ICE, which we heard a lot, or it has to do with people having their job hours cut, so they're spending less. Jessica Mendoza Welcome to The Journal, our show about money, business and power. I'm Jessica Mendoza. It's Wednesday, June 18th.

Coming up on the show, Latino consumers are pulling back the beverage industry, the companies behind drinks like Coke, Sunny D, and Gatorade. What brought Laura to Houston was a data point that caught her eye from one of the companies she covers, Constellation Brands. Constellation, which owns Modelo and also Corona, they talked about how they had a drop in sales. When we say like their sales are down, by how much? You know, it's not a humongous number.

Constellation's beer sales to retailers fell 1% in their most recent reporting quarter, which was back in April. The 1% sounds like not a big number. That's significant because it's the first time that their sales have fallen since 2013. The drop in sales came largely from Latino consumers, a group that makes up about half of Modelo's customer base in the U.S. Modelo is currently the most popular beer in America. So because the Hispanic population is so important to Constellation, they have been open on their earnings calls,

talking about the softness. Welcome to the Constellation Brands Q4 fiscal year 2025 earnings call. They also have done a lot of talking to people out in different markets to ask them, are you going to the supermarket? Where are you going? Are you drinking beer? Are you having parties?

And the fact is, a lot of consumers in the Hispanic community are concerned right now. Two thirds of them are concerned about higher prices on things like food, gas, and other essentials. Over half are concerned relative to immigration issues and how those impact. A number of them are concerned about job losses in industries that have a high Latino employment base. Another company that reported a loss in sales is Coca-Cola. And like Constellation, the company has seen Latinos pull back on spending because of inflation

and economic uncertainty. But Coca-Cola also had the added situation of a social media bread boycott. Coca-Cola is now being boycotted, guys. Essentially earlier this year, there was a video circulating on social media that purported that Coca-Cola had called immigration on its employees. Coca-Cola has said many times that this is false, this is unequivocally false. However, the videos and others like it have spread all over social media. So that obviously had an impact on sales, but altogether, you know, the boycott, the

pullback by Hispanic consumers, and like, you know, the boycott, the pullback by Hispanic consumers, and general inflation issues led to Coca-Cola having a volume drop of 3% in North America last quarter. And that's generally not something that you'll see. Coca-Cola is a pretty strong performer, and that kind of shows the impact that's happening there. And Laura says that impact goes beyond Constellation and Coca-Cola. Hispanic spending has been falling across all kinds of industries. So what other companies are seeing this trend?

How widespread is it? So it's pretty widespread. Like I said, we've seen it from Constellation Brands, which makes Modelo, but we've also heard about it from companies like Toothpaste Maker Colgate, Wingstop. To that Hispanic consumer, lower middle income, and where we saw a meaningful pullback in our business. Boston Beer, which makes Twisted Tea and truly seltzer. Pullback from the Hispanic consumers, they're just not going out as much.

So I think that it really spans different retailers and different kinds of things. So not just beverages. The Hispanic population has been one that companies want to court. They want Hispanic consumers that are a huge part of the US population to be buying their products, right? This is a huge buying group that is really important from a corporate perspective. Laura talked to analysts, company executives, store owners, and Latino shoppers.

And she heard that across the country, Latinos are changing shopping habits, in large part because of immigration enforcement. Specifically in places like Southern California and Texas, Latinos are changing shopping habits in large part because of immigration enforcement. Specifically in places like Southern California and Texas, many immigrants are avoiding liquor stores because of the show ID to make a purchase and they may not want to do that even if they are legally here because they might have a family member or a friend that they think might be put in danger. There's also situations where Latino shoppers are shifting their shopping to large retail chains. And that's kind of in an effort to blend in in a crowd instead of going to smaller bodegas or, you know,

supermarkets that might primarily serve Hispanic consumers. After the break, Laura goes to a community in Texas that's feeling the financial impact of ice enforcement firsthand. Okay, we're going to make a right on 2.3 miles on Hercules Road, and then we have to do some kind of squiggly thing. miles on Hercules Road, and then we have to do some kind of squiggly thing. Laura visited a cluster of rural communities in Liberty County, about 40 miles northeast of downtown Houston. It's a wooded, flat area of Texas that's grown quickly in recent years. New businesses and homes of all kinds are everywhere, attracting scores of immigrants. This would kind of be the American dream to live in one of these homes.

These are cute houses, but they vary, right? Like that's a trailer that's been converted into a house. There's a lot of trailers. Since 2023, the area has been the target of scrutiny from conservatives in Texas. Some have called the area a haven for undocumented immigrants. And in February, ICE and the Texas Department of Public Safety, or DPS, launched a high-profile operation. Tonight ICE agents descended

on a controversial development in Liberty County, targeting criminals and illegal immigrants. The governor's office said they arrested over 110 undocumented people during the operation. On her trip, Laura met with a local businessman, Dennis Kim. He owns a convenience store called Let's Go Market and several other stores in the area. I'm curious what's the best seller here in terms of beverages. Is it Modelo?

Beverage is Modelo? Beverage? Modelo, for sure. Everybody. The contractors, yeah, everybody. Dennis grew up in the region, and he's seen it transform over the years. As the area attracted more Latinos, he's updated what he sells to meet their needs. Take, for example, here. We have all Hispanic-inspired quesos and cheeses.

I mean, this is from, you know, Salvador, Honduran. You know, we have different type of, you know, crema. Our chips, like, we have a section of imported chips. And honestly, like, these Cheetos, they taste like Cheetos, but it has more of a corn taste. Dennis says that when ICE came to town in February, his sales fell by nearly a third. Since then, sales are back up,

but they haven't fully recovered as foot traffic continues to be slow. And if there's law enforcement in his parking lot, whether ICE or not, Dennis says his customers tend to stay away. We do notice that people are, you know, sometimes a little hesitant to come out when they see an influx of cars here, you know,

like police officers or whatever, DPS and stuff like that. Have you had any like police or DPS in your parking lot? Yeah, but usually, I mean, to be honest, for me as an operator and Camille's story, I guess I'm kind of used to it, but we always welcome the local police officers here, you know? Of course, of course,

especially in this current, like, context, you know? This is what I think. This is my honest opinion. I think the majority of people have their papers, but they might have a relative that does not. So they don't want their relative to get in trouble or something like that. So I think that's what causes the fear. Other store owners told Laura they regularly see ICE agents in their parking lots, which often scares away customers.

Store owners also said that they've seen parents send their U.S.-born children out to buy eggs, milk, and other essentials. Outside, Laura met with one of Dennis' customers, Manuel Medina. He stopped by for some gas and a bottle of mineral water. Manuel is retired, on a limited budget, and he says he's had to cut his spending across the board. We're taking the majority of the money. Not just us, the Hispanics, but the middle class, who are called. Everything is on the ground.

Manuel says that as prices for essentials go up, everyone in the middle class is struggling, not just Hispanics. But he says he's heard from many in his community who are staying home, hoping to avoid ice. And he says it's hitting Hispanic businesses hard. On weekends, food vendors would gather in the area, in parking lots and roadsides, selling tacos and freshly squeezed juice. But many of those businesses aren't showing up anymore.

And when Manuel walks into a store, he walks in with apprehension, because he might run into an ICE agent. That's the problem, Manuel says. People aren't shopping, and while deportations are going on, it will only get worse. So Laura, given everything that's going on with economic pressures and the threat of deportation, is there anything that can be done to reassure Hispanic shoppers? So that's a good question. I've asked a lot of people what they're doing to try and get to the consumers,

and there's not really an easy answer, right? I've asked a lot of companies, what are you doing to bring back Hispanic consumers? And especially with a situation like immigration, it's not a clear-cut answer. Right, it's not clear what a company can do to change the environment in which they're selling their products. Right, that's not really something they can control at all. What does this tell you about what's going on in this Hispanic community?

I mean, the main theme that I got when we were out there was just like, there's a lot of fear and there is a big tightening of the purse strings. Like it's all about saving money and it's all about being safe. And in places like Houston, where there are new immigrants, I mean, the pullback's gonna continue. It's just, unless something changes and unless time is just what makes things better. For Dennis Kim, the owner of Let's Go Market, he says there's not much he can do about

the current moment. What could I possibly do? Honestly, like, these are all big level nationwide issues, right? So and to me, like in order to keep my head levels, I can only control what I control. Like for me, maybe the one thing I can control is to have the best possible business here and attract other customers here. I don't know. That's part of today, Wednesday, June 18th.

The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Ariane Campo Flores and Enrique Perez de la Rosa. Thanks for listening. See you tomorrow.