The impact of the pandemic on retail in El Paso, Las Cruces and the region


Comment: We use the term BC (Before Christ) and AD (Anno Domini or in the year of our Lord) to refer to the separation of time through the years. I think a lot of people will modify this system so that BC stands for “before COVID” and AC stands for “after COVID”. These terms have special meaning for retail businesses, especially those located across the US border in cities such as Juarez and El Paso. In addition to non-essential businesses being closed at the start of the pandemic, some for months, a different system for dealing with people crossing the border has been put in place.

The United States has banned non-essential Mexican travelers from crossing the border for shopping, entertainment or to visit family. Essential Mexican workers, people seeking medical care in the United States and students were allowed to continue crossing. In many cases, proper documentation and a letter from a doctor or employer are required. On the other hand, Mexico hasn’t stopped US citizens from entering that country, and many of those who have family in Mexico or shop there regularly cross over as usual. Officials at US ports of entry have not stopped Americans from returning to the United States

This means that Americans continue to be free to shop in Mexico and frequent bars and restaurants if they are allowed by the Mexican government to be open. I know Americans who cross into Mexico weekly for such purposes and continue to complain about the long lines at ports of entry. However, many Americans are choosing to stay close to home during the pandemic, and Mexican restaurants, stores and bars that receive a lot of revenue from American tourists are suffering.

It’s a similar story for US border retailers and entertainment venues, the vast majority of which have been allowed to reopen as COVID-19 infections continue to decline, but for different reasons. These American companies are heavily dependent on Mexican patrons for much of their revenue. For example, research has been conducted showing that an average of 15-20% of retail in El Paso is represented by Mexican shoppers. In pre-pandemic times, this was demonstrated by seeing so many Mexican license plates in stores such as Target, Wal-Mart, and local businesses. It was common to hear Spanish spoken in shops and restaurants by entire families who had crossed the border for the day.

I’ve spoken to several US border retailers who’ve seen their revenue decline because their Mexican customer base, who were deemed non-essential travelers, didn’t spend money in their stores. This has sparked movements at the border demanding the US government lift or relax the travel ban so border businesses can get back on track. The US government periodically funds this policy, but has consistently extended it.

The current border retail situation has created an interesting black market for many entrepreneurs. Friends and relatives who may be traveling from Mexico to the United States, or US citizens traveling to Mexico, are encouraged to bring groceries and other items. A friend of mine tells me she won’t tell anyone she’s going to her ranch in Mexico because she’s tired of being hassled to bring back a list of items, which can take a while.

Some people in the United States have formed mini-delivery companies that take orders from customers in Mexico and charge for their crossing south. Thus, a game of cat and mouse is played with Mexican customs as to the nature of the goods and who will ultimately consume them. If a person claims to live in Mexico, as many Americans do, Mexican customs personnel will generally not bother them for groceries and items for personal use. Many Mexican entrepreneurs arrive in the United States with suitcases, as if they were traveling. They will then go to retail stores and fill them with clothes, shoes and other items. If inspected upon return to Mexico, they will claim it is for personal use to avoid tariffs. These items will then end up on a shelf in a Mexican retail store or for sale at a flea market.

Economics teaches us that restricting part of a market almost always results in the establishment of a black market. The restriction of Mexican buyers in the United States creates a black market of goods from the United States being shipped to Mexicans who cannot cross the border. It is heartbreaking to see businesses on both sides of the border suffering due to COVID-related travel restrictions. However, governments must strike a balance between the safety of their citizens and the health of the economy. It is an exercise that has been going on at the border since the start of the pandemic. In the future, many border retailers will mark time by BC and AC.


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