"No More Drinking, Either"
Hispanics, Who Make Up 20% of U.S. Population, Cut Back on Spending
Modelo CEO Lowers Sales Outlook as Premium Beer Sales Drop
As crackdowns on undocumented immigrants intensify in the United States, Hispanic consumer spending has noticeably contracted, and companies that primarily serve this demographic are being hit one after another. Analysts say that the backlash from these crackdowns is affecting the broader U.S. economy.
Shoppers are watching protesters marching through downtown opposing President Donald Trump's immigration policies. Photo by AFP News Agency
On September 6, Bloomberg News reported, "The Trump administration's sweeping crackdowns have had a chilling effect even among Hispanics with legal status." Hispanics, who make up 20% of the U.S. population, were a major driver of post-pandemic economic recovery, but have recently begun to cut back on spending.
Doris Aguirre, an immigrant from Honduras, virtually attended the Sunday service at Lincoln United Methodist Church, which is centered around immigrants, due to threats of immigration raids. Photo by Reuters Yonhap News
According to research firm Numerator, Hispanic household spending showed virtually no growth in the year through June. In contrast, spending by white and Black households increased modestly over the same period. A leader of a Hispanic organization stated, "Even legal residents are curbing their expenditures, cutting back on parties and dining out, and increasing delivery orders."
The impact is spreading across industries. Constellation Brands, a beer company that derives half its sales from Hispanic consumers, recently lowered its earnings outlook. CEO Bill Newlands said, "The decline in premium beer consumption among Hispanics has been particularly pronounced." Beauty company Coty and hotel chain Wyndham Hotels & Resorts also reported that uncertainty over immigration policy has led to a slowdown in business. The restaurant industry is likewise experiencing shrinking sales in states with large Hispanic populations, such as California, Texas, and Nevada.
Nikkei reported, "The strengthened crackdowns are already weighing on economic activity in the U.S.," and warned that "the impact could spread beyond Hispanic workers and consumers to Asian foreign-invested factories as well." In fact, at a Hyundai Motor and LG joint battery plant in Georgia, around 300 Korean workers were recently arrested. Nikkei added, "Foreign companies, including those from Japan, are likely to become increasingly cautious."
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