Mexico’s retail sector delivered a clear upside surprise at the end of 2025, offering fresh evidence that domestic demand remains a stabilizing force for Latin America’s second-largest economy. Retail sales rose 4.4% year-on-year in November, accelerating from 3.4% in October and significantly outperforming market expectations. The reading marked the seventh consecutive month of expansion and the fastest annual growth rate since mid-2023, underscoring a consumer landscape that is proving more resilient than many had anticipated.

This acceleration comes at a time when global growth remains uneven and financial conditions tight, making Mexico’s internal demand dynamics increasingly important for investors assessing regional opportunities and risks.

A Shift Toward Discretionary and Non-Essential Spending

A closer look at the composition of retail activity reveals a notable rotation in consumer behavior. Spending gains were strongest in healthcare products, household goods, technology-related items, and personal-use articles, all of which posted high single-digit to near double-digit growth. Sales of motor vehicles, spare parts, fuels, and clothing-related categories also expanded at a solid pace, pointing to improved confidence among middle-income households.

By contrast, purchases of groceries, food, beverages, and tobacco declined sharply, highlighting a divergence between discretionary consumption and essential spending. This pattern suggests that while consumers are willing to spend on upgrades, durable goods, and lifestyle-related items, they remain cautious when it comes to everyday expenses. For policymakers and investors alike, this split offers an important signal about inflation fatigue and the lingering impact of elevated living costs.

E-Commerce Emerges as a Structural Growth Engine

One of the most striking features of the November data was the continued surge in non-traditional retail channels. Sales conducted through online platforms, catalogs, television, and similar formats jumped more than 20% from a year earlier, reinforcing the structural shift toward digital consumption in Mexico.

This trend carries strategic implications beyond headline retail growth. Expanding e-commerce penetration supports productivity gains, logistics investment, and cross-border trade integration, particularly with the United States. For global retailers and technology-driven platforms, Mexico’s consumer market increasingly resembles a hybrid model, combining physical retail strength with rapidly scaling digital adoption.

Momentum Builds on a Monthly Basis

Sequentially, retail trade rose 1% from October on a seasonally adjusted basis, following an upwardly revised increase in the prior month. This pace far exceeded expectations and suggests that momentum strengthened as the fourth quarter progressed. From a macro perspective, such monthly gains improve the likelihood that private consumption provided a meaningful contribution to overall economic growth toward year-end.

However, the broader historical context tempers some of the optimism. While current growth is above the long-term average, it remains well below the extraordinary post-pandemic surge seen in 2021, reinforcing the view that Mexico’s recovery has entered a more normalized, albeit uneven, phase.

What Comes Next for Mexico’s Consumer?

Looking ahead, the sustainability of retail momentum will depend on real income growth, inflation trends, and financial conditions in both Mexico and the United States. A slowdown in food spending may signal pressure on lower-income households, even as higher-income consumers continue to drive discretionary demand. Investors should watch whether online sales growth remains elevated and whether weakness in essential categories begins to spill over into broader consumption.

For now, Mexico’s retail data sends a clear message: the consumer is not retreating, but confidence is selective. That balance may define the country’s economic narrative in 2026.