TGT Target Corp

By Khadeeja Safdar 

Hispanic consumers in the U.S. are shopping less, Target Corp.'s chief executive said, potentially deepening the country's retail woes.

At a technology conference in Aspen, Colo., on Tuesday, Target CEO Brian Cornell said the slowdown has been apparent for the past few months.

"There's almost a cocooning factor," he said. "They are staying at home. They are going out less often. Particularly around border towns in the United States, you're seeing a change in behavior."

Mr. Cornell said the falloff in shopping by Hispanics has hit retailers across the industry, citing data provided to Target by NPD Group Inc.

He didn't mention President Donald Trump by name, but Mr. Trump campaigned on promises to crack down on illegal immigration and to build a wall between Mexico and the U.S. Since he took office, businesses around the U.S. that cater to immigrant communities have seen steep drops in foot traffic and spending, and many say their customers are avoiding public places out of fear they could be stopped by authorities.

Those changes in shopping behavior are "concerning to me and should be concerning to a lot of us," Mr. Cornell said.

Since becoming Target's CEO in 2014, Mr. Cornell has been trying to better appeal to Hispanic shoppers, including spending more money on Spanish-language television ads and adjusting the retailer's merchandise selection.

Hispanic shoppers have become increasingly important to Target and other retailers as their numbers and wealth have grown. Hispanic buying power reached $1.4 trillion in 2016 -- an increase of 9% from 2010 and 10% of total U.S. buying power -- and is expected to reach $1.8 trillion by 2021, according to Nielsen.

Earlier this month, NPD analyst Matt Powell wrote in a blog post that athletic footwear sales to Hispanics have been "quite soft, after several years of good growth." He said he expects the slowdown to contribute to weaker back-to-school sales in the category.

U.S. retailers are already struggling with declining foot traffic and the shift of consumer spending to e-commerce outlets, forcing them to close stores and cut jobs.

Target has been battling those forces as well, though earlier this month it raised its sales outlook, saying it now expects a modest increase in sales for the current quarter at stores open at least a year. It is slated to report results next month.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

July 18, 2017 17:12 ET (21:12 GMT)

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