Mexican housewife Lorena Villasenor set a high bar for ``shop 'til you drop.'' She left her home in Saltillo at 4 a.m. for a five-hour drive to the U.S. border, combed stores in Mercedes, Texas, until they closed and returned home after midnight.
Villasenor is among thousands of Mexican shoppers flocking to the U.S. for bargains at retailers they don't have at home. That's ranking stores along the southern edges of Texas, Arizona and California at the top in sales at chains such as Target Corp., Eddie Bauer Holdings Inc. and Skechers USA Inc.
``When Mexicans come to shop, they're buying, not just browsing,'' said Mario Guzman, 28, manager of the Skechers in an outlet mall that opened last month in Mercedes. He said his store was the highest-selling for the shoe retailer in the first week of December.
The border's holiday shopping season is shaping up as one of the best on record as Mexico's economy grows at 4.7 percent, the highest rate in six years. The peso's 6.2 percent gain against the dollar in the past six months adds to the savings for Mexicans on clothes, shoes and electronics.
The peso has been stable for eight years, breaking a three- decade string of currency devaluations and high inflation, said Keith Phillips, a senior economist with the Federal Reserve Bank of Dallas. Retailers have recorded steady gains since the last devaluation in December 1994 caused sales to plummet and shops to close along the 2,000-mile (3,200-kilometer) frontier.
``This industry is impacted a lot by the exchange rate,'' Phillips said. ``This means the retailers are doing well from both a growth and stability sense.''
$1,000 a Trip
Mexican shoppers come from Monterrey, the northern industrial hub that is 150 miles south of Laredo, Texas, and from as far as Mexico City, 700 miles away. They spend $500 to $1,000 a trip, said Michael Patrick, director of the Texas Center for Border Economic and Enterprise Development at Texas A&M International University in Laredo.
Laredo's retail sales will exceed $3 billion this year for the first time, said Miguel Conchas, president of the Laredo Chamber of Commerce. Sales in McAllen, Texas, will increase as much as 10 percent, said Steve Ahlenius, president of the local chamber. Mexicans generate half of Laredo's retail sales and more than a third of McAllen's, according to a Dallas Fed study.
Shopping was the principal purpose for visiting San Diego for 63 percent of Mexicans waiting to cross from Tijuana, according to a survey commissioned last year by the San Diego Association of Governments. Mexicans spend more than $1 million a day in Tucson, Arizona, said Felipe Garcia, vice president of Mexico marketing for the Metropolitan Tucson Convention & Visitors Bureau.
NAFTA Impact
More than a decade after the North American Free Trade Agreement slashed tariffs and opened investment between the U.S., Mexico and Canada, shops in the U.S. still offer more variety, better quality and lower prices, Mexican shoppers said.
While the entry of Bentonville, Arkansas-based Wal-Mart Stores Inc. has spurred competition among Mexico's grocers and general stores, the country still has less competition in department-store and electronics retailing. Prices are driven up by tariffs on Chinese and other Asian goods, some topping 100 percent.
A pair of Dockers pants costs 599 pesos ($55) at El Puerto de Liverpool department store in Monterrey, 45 percent more than the $29.99 at Macy's in McAllen. A Ralph Lauren long-sleeve shirt costs 1,125 pesos ($104) in Monterrey and $85 at Macy's, owned by Cincinnati-based Federated Department Stores Inc.
``The difference is huge,'' said Villasenor, 33, carrying an armload of packages. She spent more than $500 on clothes and toys during her trip to Mercedes.
Two-Hour Wait
Shoppers waited as long as two hours to enter the parking lot when Chelsea Property Group opened an outlet mall in Mercedes last month. Mexican buyers were one reason the company, owned by Indianapolis-based Simon Property Group Inc., chose that town, Simon Chief Financial Officer Steve Sterrett said.
``The Chelsea property we opened in Mercedes is going absolute gangbusters,'' Sterrett said.
La Plaza Mall in McAllen is among Simon's top 20 performers, measured by sales per square foot, ranking with Houston's Galleria Mall and Roosevelt Field Mall in Garden City, New York, he said. Chelsea may seek other locations for outlet malls that attract Mexican shoppers, he said.
The Eddie Bauer in the Mercedes mall had the best sales in November for the chain's outlet division, manager Belinda Lopez said. She had to call in six extra workers the weekend of Dec. 2 -- a three-day weekend in Mexico -- after the four clerks on duty were overwhelmed. Lopez estimates 80 percent of weekend customers come from Mexico.
``We're doing extremely well,'' she said. ``We've exceeded all the expectations set by the company.''
Luis Morales avoids buying clothing in Monterrey and instead makes several trips a year to the U.S. The 34-year-old architect, his wife and three children spend $1,500 to $2,500 each time on clothes, toys and electronics. A typical shopping day lasts 10 hours, he said.
``It's pure shopping,'' he said. ``That's what we came here for.''