El Super and Fiesta Mart feel the impact of immigration raids and restrictions in the United States: their sales are falling
PHOTO ART: MERCA2. 0 | GEMINIChedraui’s operations in the United States faced a challenging second quarter due to a decline in visits toEl Super and Fiesta Mart, two supermarket chains primarily targeting. . .
PHOTO ART: MERCA2. 0 | GEMINIChedraui’s operations in the United States faced a challenging second quarter due to a decline in visits toEl Super and Fiesta Mart, two supermarket chains primarily targeting Hispanic consumers. The company linked this trend to the tightening of immigration policies, particularly in Southern California and Texas. Grupo Comercial Chedraui reported that same-store sales in its U. S. business declined 2. 3% in dollar terms during the second quarter of 2026. The result was affected by a lower number of transactions at its El Super and Fiesta Mart formats. Although the financial report does not specifically mention individual immigration enforcement operations or raids, it does attribute the lower customer traffic to stricter immigration policies. This environment can generate uncertainty among immigrant communities and reduce their visits to supermarkets and other commercial establishments. In addition to immigration restrictions, other factors limited consumer spending, including higher gasoline prices and a reduction in benefits distributed through the Supplemental Nutrition Assistance Program, known as SNAP. How did immigration policy affect Chedraui in the United States?Grupo Comercial Chedraui CEO Antonio Chedraui explained that same-store sales in the U. S. business continued to show weakness due to a reduction in the number of transactions. “At Chedraui USA, Same-Store Sales continue to show weakness, affected by a decline in transactions, explained by stricter immigration policies, mainly in Southern California and Texas,” said Antonio Chedraui, CEO of Grupo Comercial Chedraui. The company explained that the impact began toward the end of the second quarter of 2025 in California and in the middle of the third quarter of that year in Texas. As a result, the 2025 comparison period still reflected a high base that did not fully capture the effects of the immigration environment. The restrictions particularly affected El Super and Fiesta Mart because of their exposure to the Hispanic market. A heightened perception of risk may lead some consumers to reduce their travel, consolidate their shopping trips, or prefer stores located closer to their homes. How much did Chedraui’s sales fall in the United States?Chedraui USA’s total sales decreased 2. 1% in dollar terms during the second quarter of 2026, mainly due to a reduction in transactions at its formats targeting Hispanic consumers. The impact was greater when the results were converted into Mexican pesos. U. S. revenue fell 11. 6% to 34. 977 billion pesos, compared with 39. 576 billion pesos reported a year earlier. The difference between the decline in dollar terms and the drop in pesos was related to the exchange rate. The Mexican peso appreciated 9. 7% against the dollar during the period, with an average exchange rate of 17. 40 pesos per dollar. A stronger peso reduces the accounting value of revenue generated in the United States when it is converted for inclusion in the consolidated results of a Mexican company. The combination of lower sales in the U. S. market and currency appreciation contributed to a 3. 9% decline in Grupo Chedraui’s consolidated revenue, which fell to 71. 035 billion pesos. El Super and Fiesta Mart lose profitabilityThe decline in sales also affected the profitability of El Super and Fiesta Mart. The combined EBITDA of the two formats fell 22. 3%, from 1. 817 billion pesos in the second quarter of 2025 to 1. 411 billion pesos in the same period of 2026. The EBITDA margin stood at 8. 8%, compared with 9. 8% a year earlier, representing a decline of one percentage point. Chedraui explained that the decrease was a consequence of the loss of operating leverage. This occurs when a company maintains a significant portion of its fixed costs, such as rent, wages, utilities, and logistics, but generates fewer sales to absorb those expenses. El Super ended June 2026 with 71 stores in the United States, while Fiesta Mart operated 60 locations. Combined, the two chains had 131 stores primarily targeting Hispanic consumers. During the quarter, Chedraui opened a new El Super store in California despite the weakness observed in transactions. What is El Super and which consumers does it target?El Super is a supermarket chain focused on the needs of Hispanic communities. Its stores offer fresh food, meat, fruits, vegetables, and products associated with Mexican and Latin American cuisine. Fiesta Mart maintains a similar value proposition and has a significant presence in Texas, one of the states identified by Chedraui as being affected by the tightening of immigration policies. The positioning of both chains allows them to establish a close relationship with Latino consumers, but it also makes them more sensitive to economic, political, and social changes affecting this population. Reduced SNAP benefits are also putting pressure on salesChedraui identified the reduction in resources distributed through SNAP as another factor that weakened consumer spending in the United States. The program provides food-purchasing assistance to low-income households. A reduction in available benefits limits the spending capacity of some consumers, particularly at supermarkets and stores selling basic necessities. Higher gasoline prices also added pressure. Rising transportation costs can reduce households’ disposable income and discourage trips to supermarkets located farther away. These factors created a challenging environment for El Super and Fiesta Mart: lower customer traffic linked to immigration policies, reduced food assistance benefits, more expensive gasoline, and a high comparison base. Smart & Final better withstands weaker consumer spendingSmart & Final showed more stable performance than Chedraui’s Hispanic-focused chains. Its same-store sales declined by only 0. 4%, as an improvement in the average ticket partially offset a lower number of transactions among individual customers. In addition, Smart & Final’s EBITDA increased 6. 2% in Mexican pesos to 1. 572 billion pesos. Its EBITDA margin improved by 130 basis points, from 7% to 8. 3%. The company attributed this performance to efficiencies achieved at the Rancho Cucamonga distribution center, a higher gross margin, and a more efficient expense structure. The contrast was significant: while Smart & Final’s EBITDA increased, EBITDA at El Super and Fiesta Mart fell 22. 3%. This shows that the impact of immigration policies and lower customer traffic was more pronounced among formats with greater exposure to Hispanic consumers. Chedraui continues its expansion in the United StatesAt the end of the second quarter, Grupo Comercial Chedraui operated 384 stores in the United States: 253 Smart & Final locations, 71 El Super stores, and 60 Fiesta Mart locations. The company reiterated its commitment to investment in both Mexico and the United States. It also reduced its U. S. bank debt by 20. 5%, from $456 million to $362 million, through early repayments of long-term obligations. However, the commercial outlook remains influenced by external factors. Until the shopping frequency of Hispanic consumers recovers, El Super and Fiesta Mart will remain exposed to lower cost absorption and continued pressure on profitability.