Tijuana Retail Reaping Profits That Once Flowed to San Diego

President Trump’s stance on immigration is reshaping consumer tendencies in the San Diego-Tijuana region, with businesses in Mexico reaping profits that once went to stores in the U.S. amid a rise in Mexican patriotism.

Baja California visitors -- primarily from Tijuana -- spend more than $4.5 billion a year on retail and entertainment purchases in San Diego County, according to Crossborder Group, a binational market research entity. But many of them are now opting to make those same purchases in Tijuana.

Like thousands of other Tijuana shoppers, Lizbeth Miranda used to do a lot of her wardrobe shopping in San Diego. But she said Trump’s comments about Mexicans have made her feel “uncomfortable” and she now wants to show off her Mexican pride by buying clothes at home.

Earlier this month, she bought several T-shirts emblazoned with Tijuana’s area code, 664, at a store called "Tijuana: I Love 664."

“I like buying things here more, to support my country,” Miranda said. “I’m proud of being Mexican and want to support my country.”

People in Mexico have been paying close attention to Trump’s comments about immigrants because many have families in the U.S. that could be affected by his policies. Many are offended by his descriptions of immigrants as “rapists” and “criminals,” and his claim that Mexico will pay for a $20 billion-plus border wall.

The anger has triggered a newfound sense of Mexican patriotism, which has been beneficial for Tijuana retail, according to Tijuana's Chamber of Commerce. Rumors about tougher customs inspections are also scaring consumers away from San Diego, and instead boosting consumer spending in Tijuana.

“I think all of the publicity about Trump, about his wall, and all of that blah-blah-blah, I think lots of local (Tijuana) people have stopped buying American products and have stopped shopping in the U.S.,” said Felipe Acevedo, a Tijuana arts and crafts vendor who said he's seeing a boom in sales to Mexican customers.

Acevedo said Tijuana residents are increasingly interested in ceramic mugs, sombreros and other products that are “made in Mexico.” His store is located on Avenida Revolución, which used to cater to San Diego tourists in quest of cheap margaritas and Mexican souvenirs. Now the street is crowded with residents from Mexico and offers merchandise geared toward locals.

Tijuana’s Chamber of Commerce launched a campaign in November to ride the new wave of Mexican pride: “Yo Compro en Tijuana,” or “I Shop In Tijuana.” It encourages businesses to do what they can to compete with San Diego businesses -- for example, allowing customers to return items that are broken or do not fit, a practice that is less common in Mexico than in the U.S.

“(Trump) has awakened a sense of Mexican patriotism,” said Mario Escobedo Carignan, president of Tijuana’s Chamber of Commerce. “He says, ‘America first, then the rest of the world.’ So we’re doing the same.”

While Tijuana has seen the benefits of Trump’s comments about Mexico, San Diego businesses are taking a hit. The neighborhood of San Ysidro, which sits on the north side of the border, used to be a magnet for Tijuana shoppers. Not anymore.

Sunil Gakhreja owns Sunny Perfumes in downtown San Ysidro. He said his business has seen a 50 percent decrease in sales since Trump was elected.

“Ninety-nine percent of our customers are Mexico-based. If they don’t cross, we don’t sell. And not just my store. All over San Ysidro,” he said.

On holidays, Sunny Perfumes used to become so crowded that Gakhreja had to hire extra help. But on Mother’s Day this year, he needed only one employee, and most of the time, the store was empty.

“We are in trouble,” he said.

Olivia Campos is the owner of Carolin Shoes next door. She said rumors tied to Trump’s stance on immigration are discouraging people from crossing the border into the U.S. because they fear interacting with customs officers.

“They’re afraid they’ll take away their passports, their green cards, some people say they’re even checking cellphones,” she said.

Campos said sales in her store dropped 70 percent since November.

Business in San Ysidro was already struggling last year because of a plummeting Mexican peso, which was hurting the purchasing power of Tijuana consumers. The exchange rate has since stabilized, but retail stores are still having a hard time.

Jason Wells, executive director of the San Ysidro Chamber of Commerce, said fear, uncertainty and anger tied to the Trump administration are now to blame for San Ysidro’s struggling economy.

He said retail citywide has dropped 30 to 50 percent in the past year, with non-brand clothing stores seeing the greatest decrease of 65 percent.

“A lot of this has been the national rhetoric,” he said. “And yes, there is a fear, and it’s palpable, you can feel it in the street.”

Wells said San Ysidro is trying to devise new strategies to recover lost business -- perhaps diversifying products and services, or offering discounts. But for now, Mexico continues to reap the profits that once belonged to the U.S.

“I get asked about the wall all the time. And I said, 'You know what, a future physical wall isn’t a problem. It’s the current psychological wall that this White House has already built,' ” he said.