Target's Chief Sounds Alarm On Pullback By Hispanic Shoppers
Target Corp. Chief Executive Officer Brian Cornell is sounding alarm bells over the state of Hispanic shoppers in the U.S. -- a key growth demographic for many retailers and consumer brands.
“The Hispanic consumer in the U.S. is shopping much less,” Cornell said at the Fortune Brainstorm Tech event Tuesday in Aspen, Colorado. “They are staying home. They are going out less often.”
Cornell didn’t mention President Donald Trump by name, but he talked about a shift in behavior this year and mentioned “border towns” -- where retailers for years have depended on shoppers from northern Mexico for higher revenue. Trump took office in January after promising to crack down on undocumented immigration, especially from Mexico. Purchases by Hispanics at U.S. retailers in categories tracked by researcher NPD Group have fallen 8 percent this year.
“There’s clearly been a pullback” since Trump was elected, said Marshal Cohen, an analyst at NPD. “There’s concern about going out in an environment where you could be deported.”
As the number of U.S. Hispanics has grown over the past decade, the group’s spending power has increased and made it an in-demand demographic. Two years ago, Target began a campaign geared at Hispanics called Sin Traduccion -- without translation, that featured words with no English equivalent.
Other retailers like J.C. Penney Co., restaurant chains such as McDonald’s Corp., and consumer brands as diverse as Yoplait, Hershey and Johnnie Walker are all courting a group that now makes up about 20 percent of the population.
Apparel and accessories have also been hurt, according to NPD data through March. Food and small appliances, though, haven’t been affected, Cohen said. The decline in purchases among Hispanics comes as U.S. consumer spending overall has increased amid rising confidence, low unemployment and wage gains.
Sneakers are taking a hit with purchases by Hispanics declining at a high-teen percentage this year, according to Matt Powell, also an analyst at NPD. He said that’s after growth last year in the mid-teens range. The brands seeing the biggest impact are VF Corp.’s Vans, Nike, Skechers and Nike’s Jordan brand, according to NPD.
Powell called the drop unprecedented.
“I’ve never seen anything like it,” he said. “It’s really there and material.”