Summary of "Why Latino Consumers Are Spending Less"

Podcast: The Journal
Hosts: Ryan Knutson & Jessica Mendoza
Release Date: June 18, 2025
Produced by: The Wall Street Journal & Gimlet, in collaboration with Spotify

Introduction

In the episode titled "Why Latino Consumers Are Spending Less," hosts Jessica Mendoza and Ryan Knutson delve into the declining spending patterns among Latino consumers in the United States. This trend is affecting various industries, from beverages to retail, and is influenced by a combination of economic pressures and heightened fears of immigration enforcement.

Economic Pressures and Consumer Behavior

Rising Costs and Reduced Spending

The episode begins with Laura Cooper's observations at a Houston farmer's market, highlighting the impact of increasing prices on consumer behavior.

Laura Cooper (00:08): "We got some plums, some limes, some mangoes, it looks like."
Jessica Mendoza (00:14): Describes Isabel Aguilar's struggles as customers become hesitant to spend due to rising costs and job insecurity.

Isabel Aguilar, a vendor at the market, notes a significant decline in customer spending:

Isabel Aguilar (00:14): "The prices of goods have gone up and customers have told me that they're struggling. Some have lost their jobs. Others have had their work hours cut, so they're tightening their belts."

The overarching theme is a combination of economic strain and fear driving Latino consumers to reduce their expenditures.

Impact on Major Brands

Major companies like Constellation Brands and Coca-Cola are experiencing noticeable declines in sales attributed to this shift.

Constellation Brands

Constellation Brands, owner of popular beers like Modelo and Corona, reported a 1% dip in beer sales for the quarter ending in April—the first decline since 2013.

Laura Cooper (04:13): "Constellation's beer sales to retailers fell 1% in their most recent reporting quarter, which was back in April. Though 1% sounds like not a big number, that's significant because it's the first time that their sales have fallen since 2013."

Earnings calls reveal that Latino consumers, comprising about half of Modelo's customer base in the U.S., are contributing to this downturn due to concerns over higher prices and immigration issues.

Earnings Call Host (05:24): "Two thirds of [Hispanic] consumers 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."

Coca-Cola

Coca-Cola has seen a 3% sales drop in North America, influenced not only by economic uncertainty but also by a social media-driven boycott.

Laura Cooper (06:04): "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."

Despite Coca-Cola's denials, the rumor has significantly impacted its sales among Latino consumers.

Broader Industry Impact

The decline in Latino spending isn't confined to beverages. Various sectors, including toothpaste manufacturers like Colgate and fast-food chains like Wingstop, are witnessing similar trends.

Laura Cooper (07:44): "Boston beer, which makes twisted tea and truly Seltzer. So I think that it really spans different retailers and different kinds of things. Not just beverages."

This widespread pullback underscores the critical role Latino consumers play in the U.S. market and the challenges businesses face in retaining this demographic.

Fear of Immigration Enforcement

Community Impact in Liberty County, Texas

A focal point of the episode is Liberty County, a rapidly growing area northeast of Houston that has become a target for conservative scrutiny and immigration enforcement.

In February, a high-profile operation by ICE and the Texas Department of Public Safety (DPS) resulted in over 110 arrests of undocumented individuals:

Jessica Mendoza (10:31): "The governor's office said they arrested over 110 undocumented people during the operation."

Store Owners' Perspectives

Local business owner Dennis Kim of "Let's Go Market" shares firsthand how immigration enforcement has affected his business.

Dennis Kim (11:36): "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."

The presence of law enforcement discourages customers from visiting stores, leading to a substantial drop in foot traffic and sales.

Dennis Kim (10:54): "I mean, take for example here we have all, like, Hispanic inspired, like quesos and cheeses... Honestly, like these Cheetos. It tastes like Cheetos, but it has more of a corn taste."

After the ICE operation, Dennis observed a nearly one-third decline in sales, which has yet to fully recover:

Dennis Kim (11:53): "We noticed that 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."

Shifting Shopping Habits

Latino consumers are altering their shopping behaviors to minimize the risk of encountering ICE agents:

• Avoiding Smaller Stores: Preference is shifting towards large retail chains to blend into crowds, avoiding stores with a high Latino presence.

  Laura Cooper (08:34): "Specifically in places like Southern California and Texas, many immigrants are avoiding liquor stores because they have the show ID to make a purchase."

• Selective Store Visits: Some consumers opt to stay home to avoid potential encounters with law enforcement.

  Manuel Medina (Customer, 13:53): "When Manuel walks into a store, he walks in with apprehension because he might run into an ICE agent."

Community and Business Responses

Efforts to Reassure Consumers

When questioned about potential solutions to regain the trust and spending of Latino consumers, both hosts and business owners express uncertainty.

Laura Cooper (14:31): "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."

Businesses feel constrained as immigration policies and economic factors are beyond their control, making it challenging to implement effective strategies to reverse the trend.

Business Resilience

Store owners like Dennis Kim focus on optimizing their operations within the existing challenges, aiming to attract a broader customer base despite the environment.

Dennis Kim (15:37): "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."

Conclusion

The episode concludes by emphasizing the intertwined nature of economic pressures and immigration fears in shaping consumer behavior within Latino communities. Without significant policy changes or shifts in economic stability, the downward trend in spending among Latino consumers is likely to persist, posing ongoing challenges for businesses reliant on this vital market segment.

Laura Cooper (15:02): "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."

Additional Reporting: Ariane Campo Flores and Enrique Perez de la Rosa

Credits: The Journal is a co-production of Spotify and The Wall Street Journal.