By Waylon Cunningham
(Reuters) -Hispanic consumers in Jack in the Box’s core markets “face uncertainty and have pulled back their spending,” with the issue having an outsized impact on the U.S. fast-food chain’s sales, its CEO said.
Same-store sales for Jack in the Box declined 7.1% in the third quarter ended July 6. The company also reported a decline of 2.6% in same-store sales for another taco chain it owns, Del Taco.
Jack in the Box CEO Lance Tucker, speaking on an earnings call on Wednesday, separated the pullback of Hispanic consumers from other trends, such as a drop in spending by lower-income consumers that he said was “well in line with industry trends”
Tucker said the proportion of Hispanic consumers at Jack in the Box, which has core markets in Texas, California and the U.S. Southwest, is twice as high as some major competitors.
Tucker did not specify the “uncertainty” he believes Hispanic consumers are facing.
U.S. Immigration and Customs Enforcement officers have been intensifying efforts in recent months to deliver on Republican President Donald Trump’s promise of record-level deportations.
Rita Fernandez, director of immigration policy at UnidosUS, which describes itself as the largest Latino civil rights group in the country, said many migrants have been withdrawing from public life.
“Jack in the Box is a favorite destination and dining choice for many Hispanics,” she said, but “a day laborer who is undocumented maybe isn’t going to take that lunch break at Jack in the Box if he doesn’t know if he’ll encounter ICE on the way.”
Tucker said the pullback in spending from Hispanic consumers has been “pretty consistent” since the beginning of the year. Trump’s second term began in January.
The timeline is consistent with what Wingstop CEO Michael Skipworth said last week, when he said areas with a high proportion of Hispanic and low-income consumers have had weaker demand since the beginning of the year.
(Reporting by Waylon Cunningham; Editing by Jamie Freed)
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