Restaurant sales have weakened so far this year as consumers have pulled back on dining.
But the issue appears to be worse in areas with a heavy concentration of Hispanic consumers, particularly those who originate from Mexico, as immigration policies under President Trump have taken hold.
According to the restaurant data firm Black Box Intelligence, traffic in ZIP codes where 40% or more of the population originates from Mexico weakened just before the 2024 presidential election. And it hasn’t recovered.
In the second and third quarters of last year, ZIP codes with a heavy Mexican population were within two-tenths of a percent of national averages, according to Black Box. By the fourth quarter, traffic was 1.2 percentage points lower than the national average. So far this year, through May 11, traffic was 1.1 percentage points lower than the national average.
“We’re seeing an early but measurable shift in how immigration policy is showing up in consumer data,” Victor Fernandez, chief insights officer with Black Box, said in a statement. “In certain communities—especially those that may be more directly affected by immigration policy—restaurant spending appears to be under pressure. And when spending slows in these areas, the industry feels it.”
The data confirms what operators and executives from restaurants and other chains have said in recent weeks.
At Wingstop, for instance, same-store sales in the third quarter rose 20.9%. By the fourth quarter last year they slowed to 10.1%. In the first quarter this year they were up just 0.5%.
Wingstop CEO Michael Skipworth told analysts that the pullback wasn’t broad-based. “We actually saw this in more specific pockets, and it was pockets that over-indexed to that Hispanic consumer, lower-middle-income, where we saw a meaningful pullback in our business,” he said, according to a transcript on the financial services site AlphaSense.
Same-store sales at El Pollo Loco were up 2.7% in the third quarter last year, then slowed to 0.5% in the fourth quarter and then a 0.6% decline in the first quarter. Liz Williams, CEO of the chicken chain, cited a pullback among Hispanic consumers.
It’s not just restaurants. The pullback is being felt across a number of different industries.
“Seventy-five percent of Hispanic consumers are going to restaurants less,” said Bill Newlands, CEO of Constellation Brands, the owner of the beer brands Corona and Modelo in the U.S., according to AlphaSense. “There’s less social occasions.”
The executives are citing the Trump Administration’s immigration policies for the slowdown. President Trump has used a series of executive orders to limit immigration and deport. Immigration and Customs Enforcement agents have dramatically increased the arrests of migrants living in the U.S.
Many of these raids have hit restaurants, which are both an employer of immigrants and, in many communities, dependent upon them for their sales. Some restaurants in California have temporarily closed amid fears of more raids, according to the news site Cal Matters. A West African restaurant is considering closing after its manager was detained by ICE agents, according to the website Eater.
More than one out of five restaurant workers was born outside the U.S., according to the National Restaurant Association. U.S. Federal Reserve Chairman Jerome Powell earlier this month warned about a reduction in the labor force due to immigration policies.
But the sales data show that the raids may also be lowering sales.
“There’s a lot of concern about inflation, there’s a lot of concern about the whole immigration question,” Newlands said. “That gets doubled down if you’ve had someone in your immediate family or friends who’ve … had the issue attached to them at all. And that’s playing out in behaviors that are anti to our business, which is they’re going out to eat less.”
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