Chedraui US Immigration Sales Hit: Profit Drops to US$96M
Retail: Mexico
Key Facts
—Who. Grupo Comercial Chedraui, a major Mexican retailer that also runs the US chains El Super and Fiesta Mart through its Chedraui USA arm.
—The hit. Q2 2026 group net profit fell 11.5%, to MXN$1,825 million (about US$96 million), as US sales weakened.
—Cause. Management blames stricter US immigration enforcement, mainly in southern California and Texas, plus higher fuel prices and reduced SNAP benefits.
—US drag. Same-store sales at El Super and Fiesta Mart fell 2.3% in dollars; their combined EBITDA dropped 22.3%.
—Mexico offset. Domestic sales rose 5.1%, to MXN$36.1 billion (about US$1.89 billion), beating the ANTAD industry benchmark for a 24th straight quarter.
Mexican supermarket group Chedraui says tougher US immigration enforcement is keeping Hispanic shoppers away from its California and Texas stores, dragging El Super and Fiesta Mart sales lower and cutting group profit even as its Mexican business grows.
A Mexican Retailer’s US Problem
Grupo Comercial Chedraui is one of Mexico’s largest retailers, but it is also a sizeable US grocer. Through its Chedraui USA arm it runs El Super and Fiesta Mart, two banners aimed squarely at Hispanic and immigrant shoppers, alongside the more mainstream Smart & Final chain.
In its second-quarter 2026 results, the company said stricter US immigration policy — concentrated in southern California and Texas — was thinning traffic at those Hispanic-focused stores as customers stayed home for fear of raids and detention.
Chief executive Antonio Chedraui told investors that same-store sales at El Super and Fiesta Mart “continue to show weakness, affected by a decline in transactions, explained by a stricter immigration policy, mainly in southern California and Texas.”
The Numbers Behind the Slowdown
Group sales fell 3.9% in the quarter, to MXN$71.0 billion (about US$3.72 billion) from MXN$73.9 billion (about US$3.87 billion) a year earlier. Net profit dropped 11.5%, to MXN$1,825 million (about US$96 million) from MXN$2,062 million (about US$108 million).
The pain was concentrated in the US. Chedraui USA sales fell 2.1% in dollar terms, and same-store sales at El Super and Fiesta Mart slid 2.3%. Their combined operating profit, or EBITDA, tumbled 22.3%, to MXN$1,411 million (about US$74 million).
By contrast, the group’s Smart & Final banner proved steadier, with same-store sales down just 0.4% and EBITDA up 6.2%, to MXN$1,572 million (about US$82 million). The split shows the hit is specific to the immigrant-heavy formats, not to US grocery as a whole.
A stronger peso deepened the reported decline. Converted into pesos, US sales fell 11.6%, because the average exchange rate of 17.40 pesos to the US dollar was about 9.7% firmer than a year earlier, shrinking the peso value of dollar revenue.
Why Immigration Policy Hits These Stores
Nearly all El Super and Fiesta Mart shoppers are Hispanic, and many are immigrants or live in mixed-status households. When enforcement intensifies, those customers cut back on public outings — including grocery runs — to avoid detention or deportation.
Chedraui also flagged two reinforcing pressures: higher gasoline prices and reduced availability of SNAP food-assistance benefits, the US federal program that helps lower-income households buy groceries. Both squeeze exactly the budgets these stores depend on.
For a foreign reader, the mechanism is direct: a policy debate in Washington translates almost immediately into fewer transactions at a supermarket checkout in Los Angeles or Houston, and from there into a Mexican company’s quarterly earnings.
Mexico Holds the Line
The Mexican business moved the other way. Domestic sales rose 5.1%, to MXN$36.1 billion (about US$1.89 billion), helped by new store openings and a 4.4% larger selling floor.
Same-store sales in Mexico grew 1.3%, beating the 0.1% decline reported by retail association ANTAD and extending Chedraui’s streak above the industry benchmark to 24 straight quarters. Shoppers spent more per visit — average tickets rose 2.2% — even as the number of trips dipped 0.9%.
That resilience cushioned the group but could not fully offset the US drag once results were consolidated. Mexican strength and US weakness essentially cancelled out at the top line, leaving overall profit lower.
What Chedraui Is Doing About It
Rather than retreat, Chedraui is still expanding. It plans to open 147 stores in Mexico in 2026 — 130 of them in its small-format Supercito banner — plus four El Super and one Fiesta Mart in the United States.
On costs, the company leaned on tighter promotions, distribution efficiencies at its Rancho Cucamonga hub in California and supplier renegotiations to defend margins. Group gross margin actually rose, to 24.8% from 24.1%, despite the sales decline.
The strategy is to ride out the US soft patch while pressing its advantage at home, where its Mexican stores keep outperforming the sector. Management guided US same-store sales to a modest 1% to 2% gain for the full year, betting the immigration shock proves cyclical rather than permanent.
What It Means for Cross-Border Trade and Expats
Chedraui’s results are an unusually clean read on how US migration policy ripples into Mexico’s corporate sector. The company is Mexican-owned but earns a large share of revenue from immigrant consumers north of the border, so it sits directly on the US-Mexico fault line.
For expats and cross-border investors, the episode is a reminder that political risk is not only about tariffs. Enforcement, benefits rules and consumer confidence in immigrant communities can move a listed retailer’s earnings as sharply as any trade measure.
It also underscores how integrated the two economies remain. The same shopper base that powers a Mexican grocer’s US growth can, when frightened, become the channel through which Washington’s policies land on a Mexico City-listed balance sheet.
Frequently Asked Questions
Why are Chedraui’s US sales falling?
The company blames stricter US immigration enforcement — mainly in southern California and Texas — which is keeping Hispanic and immigrant shoppers away from its El Super and Fiesta Mart stores. Higher gasoline prices and reduced SNAP food-assistance benefits added to the pressure.
How much did Chedraui’s profit drop?
Second-quarter 2026 net profit fell 11.5%, to MXN$1,825 million (about US$96 million) from MXN$2,062 million (about US$108 million) a year earlier, as group sales slipped 3.9%. Same-store sales at El Super and Fiesta Mart fell 2.3% in dollar terms.
Is Chedraui’s Mexican business also weak?
No. Mexican sales rose 5.1%, to MXN$36.1 billion (about US$1.89 billion), with same-store sales up 1.3%, beating the ANTAD industry benchmark for a 24th straight quarter. The weakness was concentrated in the US Hispanic-focused banners.
Sources
Connected Coverage
More on Chedraui and the US-Mexico retail story.
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Sources: Expansión; Mexico Business News; Merca2.0.
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