Mexican Retail Booms Despite Earthquakes, Inflation
- Oops!Something went wrong.Please try again later.
MEXICO CITY — “People are shopping like crazy,” said Mexican fashion expert Anna Fusoni, adding that the trend is surprising everyone, as consumers continue to fill malls and stores.
This is despite two powerful earthquakes hitting the country last month and coming on the anniversary of two earlier and much more devastating ones.
More from WWD
“The trend is euphoric and everyone is spending whatever they can and traveling everywhere,” Fusoni added. “We are not sure why but it looks like people are going to spend until their credit cards run out.”
Amid such buoyancy, the twin quakes on Sept. 19 and Sept. 22 did not stop luxury department store El Palacio de Hierro from opening its latest store in the sprawling Mitikha mixed residential and retail complex, throwing a celebrity-studded bash the night before it bowed to the public on Sept. 23. El Palacio reportedly spent $140 million to erect the five-story store, which measures 430,550 square feet.
The store features a 13,670-square-foot dome (which Palacio executives boast is bigger than the Louvre Museum’s Pyramid in Paris), and hosts shops-in-shop by the likes of Jimmy Choo, Carolina Herrera, Gucci and Givenchy.
Retail consultant Miguel Angel Andreu said Mexicans have become zealous shoppers following COVID-19 lockdowns, which began to gradually ease in 2021 and shifted into full swing last summer when shops stopped asking customers to wear masks and relaxed health checks.
“People can now shop at major shopping malls like Antara [in Mexico City] and not wear masks,” Andreu said, adding that this relaxation has helped fill stores.
Retail watchdog Antad said last month that same-store retail sales rose 11.5 percent in August but Andreu forecast clothing and footwear turnover will likely grow in the high double digits this year.
Meanwhile, Mexican malls continue to open at a brisk pace, in line with forecasts for 30 locations by 2025.
There are almost 30 million square feet under construction, the bulk of which will open this year after several projects stalled during the pandemic, according to real-estate consultancy Newmark.
Following Mitikha’s opening, the next shopping mall to bow will be builder Fibra Danho’s Parque Tepeyac in northern Mexico City. The mega mall’s first phase will open late this year while the next one, which will feature a 323,000-square-foot aquarium, will be inaugurated in the first quarter of 2023.
Showing strong demand for mall traffic, the builder’s other property, Parque de las Antenas, is currently witnessing 1.3 million visitors a month, it said.
But not everyone is doing well.
While major department stores such as El Palacio, Liverpool and apparel-focused Suburbia continue to see strong demand, the pandemic has squeezed local brands and specialized boutiques, such as those selling men’s suits.
“People are consuming more international brands than before, except for Cuidado Con El Perro [a fast-growing fast-fashion retailer],” Andreu said. “We are also going more and more casual, so boutiques, such as those selling men’s tailored fashion, are struggling.”
He pointed to Bruno Corsa, Aldo Conti and Robert’s as some of the struggling brands.
But Fusoni was more optimistic.
“It depends on what kind of consumer you are,” she noted. “If you are high-end, luxury oriented, you will go to El Palacio and buy all the international looks. But if you follow certain influencers promoting local brands, you will buy those brands.”
Fusoni noted Mexican designer labels such as Benito Santos, famed for dressing Mexican Miss Universe Ximena Navarrete, are performing strongly.
Santos recently teamed with local footwear brand Dione to launch a high-end boot and bag collection featuring the “Bridget” — a high, black-velvet boot fetching 7,990 pesos, or $397 at current exchange. The collection also features the handmade, “Haleena” leather bag. The limited edition sells in upmarket malls such as Andares in Guadalajara.
Meanwhile, a string of concept stores featuring three to four designers have sprung up in trendy quarters such as La Roma or in La Juarez, giving young talent a chance to showcase their work.
But in a country where 55.7 million people remain poor (out of a total population of 130 million) and 10.8 million are still living in extreme poverty, such buoyant sales are unlikely to last much longer, analysts said. Mexican inflation, currently running at 8.7 percent, is also a cause for concern, as it is in many other countries.
