Lower investment, as well as a possible recession and reduced employment in the construction and manufacturing sectors, will lead to a decline in Mexican consumption, Fitch Ratings believes , warning that the purchase of goods and services will remain weak through 2025.
According to an analysis by the rating agency, private consumption in Mexico has declined since December 2024, specifically with regard to goods and imports.
“Same-store sales (SSS) have slowed since the fourth quarter of last year, with sales growth falling to 2.5% in March 2025, from 5.4% the previous year, according to the National Association of Self-Service and Department Stores (ANTAD) ,” the report noted.
Demand for items such as clothing, appliances, and electronics, especially among low- and middle-income consumers, faces the greatest risk, he added.
The rating agency warned about the possible growth of consumer credit , which buyers could use to finance their purchases, which could lead to bad loans.
“Increased loan origination to support sales by retailers with financial divisions could lead to potentially higher non-performing loans by the end of 2025,” he stressed.
For non-discretionary items such as food, consumer preference is shifting toward discount formats and private-label products.
“Own-brand products now represent between 20% and 50% of sales in smaller store formats, compared to approximately 5% five years ago, indicating increased demand,” Fitch said.
Despite the anticipated adverse environment, the rating agency estimated that most retail and consumer companies are prepared to weather a cyclical downturn , “without facing widespread negative rating actions.”
“Revenue for most rated retailers is expected to grow by mid- to high-single digits in 2025-2026, driven by expansion into new markets and store format adjustments,” the firm noted.
Private consumption has fallen into a period of caution generated by the upward trend in inflation in Mexico, which stood at 4.42% last May in its annual comparison and 4.51% in the first half of June , as well as by changes in the United States’ trade policy , which has increased the uncertainty when deciding on the acquisition of goods and services.
In this regard, the National Institute of Statistics and Geography (INEGI) reported that private consumption, which is one of the country’s economic drivers, fell 0.4% in the first quarter of 2025.
The slowdown in various industries and a persistent inflationary context have affected consumer confidence, which has led to some changes in its habits, according to Kantar .
According to the consulting firm, consumers are looking for more affordable and convenient options. Along these lines, the firm indicated that 60% prefer to eat at home, while 44% have sought ways to cut back on entertainment expenses outside the home.
Comment and follow us on X: @GrupoT21
