EL PASO, Texas (Border Report) – Late November and early December sales can make or break a retail business.
So, news that Mexico and the U.S. are preparing to extend non-essential border travel through Dec. 21 to prevent the spread of COVID-19 disappointed already downcast Downtown El Paso merchants.
“We’re hurting economically because there’s no visitors. We’re not selling as much as we used to. Some stores around us already closed,” said Raul Rojas, who runs a shoe store on South Stanton Street.
Prior to the mid-March start of travel restrictions, shoppers from Juarez and other northern Mexico cities made up the bulk of buyers for clothing, electronics, households, jewelry and shoe stores in the Downtown area.
But after the restrictions kept most Mexicans with tourist visas from coming across to shop or visit, stores like Lucky Forever went from seeing 10 customers per hour to perhaps one or two, Rojas said.
Mexican shoppers represent a $135 million boost to the El Paso retail economy and their absence will be felt, said Tom Fullerton, professor of economics and finance at the University of Texas at El Paso.
“A number of retail businesses throughout El Paso have already closed because of reduced sales volume in 2020. This will increase the number of business closures. It will also increase the number of commercial vacancies,” Fullerton said.
Restaurants and hotels also stand to lose from Mexicans not coming over to shop in El Paso.
“I’d say 50 percent of visitors from Mexico who come here to shop stay enough time that they have to eat at least one meal. A lot of times they have to eat two meals,” Fullerton said. “Travelers from cities in Chihuahua, Durango and even the Torreon area of Coahuila stay here overnight and the reduction in visitors from those regions is going to hurt hotel businesses as well.”
Jose Luna, a sales associate at a household items store on South Stanton Street, said he remembers helping many shoppers from Chihuahua, Mexico last year. “Even the Mennonites come. They buy out everything so they can give gifts to their family members,” Luna said. “Now the stores are empty. Even the people from Juarez aren’t coming.”
Luna said clothing retailers have been the biggest losers with the travel restrictions. Many shoppers from Juarez still buy in bulk for resale.
Statistically, Mexican shoppers primarily take electronics, clothing and shoes back home when they shop in El Paso, Fullerton said.
People in many parts of the globe are subject to COVID-19 restrictions that include reduced occupancy at stores, travel bans to certain places and stay-at-home mandates. Many of them will do their Christmas shopping online this year and El Paso residents are no exception. The bad news is that most of their dollars will go elsewhere.
“A large percentage is probably going to be diverted onto online sales or e-commerce, which means that those sales will not accrue to merchants and businesses here. They’re going to Ali Baba in China or to Amazon in Seattle,” Fullerton said.
Looking beyond the holidays, there’s likely to be good news and bad for El Paso merchants. A COVID-19 vaccine might be available for distribution to high-risk residents by the end of December. That might help reopen the economy more. But lower Christmas sales may be reflected in January layoffs.
“There’s been a lot of progress in recent months in terms of bringing down the unemployment rate here in El Paso from what was observed in June,” Fullerton said. “A lot of that progress is going to be slowed or unemployment rates are going to increase beyond what normally happens in January.”
But business closures and prolonged vacancies should lead to a decline in the commercial rents. “At this point it’s not clear how much rents (per square-foot) will decline during the first quarter of 2021, but there should be some downward movement there,” Fullerton said.
Back in Downtown, the owner of a toy shop said he will hang on no matter what.
“If we don’t stay open right now, when things come back, we won’t have a place. The customers will be gone. We stay open unless we close for good,” said a man who only identified himself as Sam, inside a business called Sam’s Toys on South Stanton Street.