How Long Can Mexican Retail Hold On as Consumption Cools?

Consumption in Mexico hasn’t collapsed—it has pulled back. And in this new cycle, growth alone is not enough: retailers must generate foot traffic, inhabit desire, and become a necessity. In times of essential spending, only those who give people a reason to return will endure.

Salvador Kabbaz leads FIBRA Danhos, owner of Parque Tepeyac, whose foot traffic grew 16% year-over-year in the first two months of 2025, according to Getin. Photo: SiiLA.

By: SiiLA News

07/31/2025

On the surface, everything looks the same. Storefronts remain lit, and malls are full. But something has changed. The noise no longer fills the halls—calculation does. Brands are moving, but with less urgency. Families are shopping, but with greater caution. And in a country where consumption is the engine, this shift in pace changes everything.

Although private consumption in Mexico remains high, its momentum is fading. Between the first quarters of 2020 and 2021—driven by post-pandemic reopening and rebound—it grew at an annual compound rate of 25.1%, according to INEGI. Since then, the curve has weakened: 4.7% in 2022, 3.4% in 2023, 4.3% in 2024, and just 0.7% in 2025.

There’s no crash, but signs of fatigue are clear. Three factors explain it: reduced consumption of imported goods—due to lower purchasing power or higher costs; stagnation in domestic goods—pressured by inflation and high interest rates; and a drop in demand for services—tied to the formal economy—just as informal employment grows.

Consumption holds, but no longer pushes forward.

This slowdown isn’t random; it reflects caution in the face of weakening confidence. In 2025, households view both their own finances and the national economy with skepticism. The Consumer Confidence Index, though still solid, has declined from 2024, dragged down by two factors: expectations that the national economy will worsen within a year and a widespread belief that it’s not a good time to buy durable goods.

The average Mexican now thinks twice before spending.

That caution doesn’t just show up in surveys—it’s visible. In malls, stores remain open, but steps are slower, fewer, and shorter. According to Progen, foot traffic rose just 3.1% in early 2025, less than half the rate recorded in each quarter of 2024.

Faced with more reserved consumers, brands are adjusting. In the country’s main retail markets—Mexico City, Monterrey, and Guadalajara—occupancy rates now exceed 90% and continue rising. Not due to rapid expansion, but to limited new inventory. And although gross absorption has slowed by 27.6% annually since 2021, it still outpaces move-outs. The result isn’t euphoria, but accuracy: fewer square meters, better chosen.

In this environment, the challenge isn’t to hold on—it’s to get ahead. To build portfolios where each asset not only attracts visits, but sparks them. To reposition aging malls, incorporate public services—healthcare, government offices, education—and partner with brands capable of sustaining both foot traffic and ticket size in frugal times.

This is not the time to diversify by reflex, but to concentrate with purpose: to bet on hybrid formats—convenience, entertainment, logistics—that anchor essential spending when aspirational spending cools. To choose locations that don’t compete on desire but command presence through what they return: time, proximity, a sense of belonging. Because in this stage, those who fail to embed themselves into the functional rhythm of daily life—those who don’t become habit—will end up surrounded by lit storefronts but empty aisles.

For more insights on the performance of the commercial real estate market, visit SiiLA Market Analytics or contact us at contacto@siila.com.mx.

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