Situated on the southernmost tip of Texas, the Rio Grande Valley lies on the northern financial institution of the Rio Grande River, which divides Mexico from the U.S. The area is made up of the 4 counties of Starr County, Hidalgo County, Willacy County and Cameron County.
Whereas the realm constantly offers with the misconceptions that usually include a border area, the truth is that The Rio Grande Valley has reworked into a serious worldwide commerce vacation spot that’s thriving in Texas, the eighth largest financial system on the planet.
Pushed by inhabitants progress, a blossoming health-care trade and sturdy commerce with Mexico, the Rio Grande Valley now has first-rate business, retail, industrial, medical, retirement and academic services. The area’s transformation right into a “rising borderland metropolis,” in response to Rice College’s Kinder Institute for City Analysis, is mirrored in its sizable binational inhabitants—roughly 2.67 million residents, with 1.29 million within the U.S. and 1.38 million in Mexico—making it the second-largest U.S. Mexico border municipality after San Diego-Tijuana.
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One of many largest drivers for the Rio Grande Valley’s retail increase is because of the area’s distinctive demographics. The realm boasts one of many fastest-growing populations within the nation. That progress is complemented by each home migration in addition to cross-border commerce, together with 12 worldwide ports of entry dealing with over $41 billion in cross-border cargo. Not like different markets, retailers within the Rio Grande Valley profit from the hundreds of consumers which can be crossing day by day from Mexico—lots of which don’t seem in U.S. census knowledge and is likely to be missed when retailers are doing their market evaluation.
This regular move of cross-border client site visitors—which Nielsen estimates to be greater than 3.5 million yearly—isn’t seasonal. It’s year-round. Persons are not simply crossing the border as soon as a month or through the holidays. The truth is, they’re crossing the border day by day to buy and supply a relentless and constant enhance to retail gross sales within the area. The research additionally highlights that just about 63 % of the three.5 million shoppers make the journey no less than one time monthly with extra frequent guests crossing 5 or extra instances month-to-month.
One other enhance for the realm, and key issue when it comes to demographics, is the inflow of retirees searching for an inexpensive various to, for instance Florida. As well as, snowbirds additionally spend winter months within the area. Current research point out the variety of “Winter Texans” is roughly 100,000 every year. The seasonal residents, who desire a second dwelling or to spend the winter season in a dry and inexpensive local weather, are sometimes bringing with them greater disposable incomes and create extra income streams for retailers.
Regardless of the demographic help, The Valley stays beneath the radar for a lot of nationwide retailers. One of many largest and commonest misconceptions is that it’s an unstable area that’s low-income, high-risk, and lacks a robust client base. Nevertheless, the info are within the numbers.
Many retailers who’ve invested retailer areas within the Rio Grande Valley for years would share that their areas within the area are thriving. Cities inside The Valley, comparable to McAllen and Brownsville, boast excessive retail gross sales. A number of the retail areas right here have ranked among the many best-performing shops nationally for manufacturers in sectors comparable to big-box low cost, smooth items and electronics. That is due, partially, to cross-border shoppers who buy items in bulk.
Vary of outlets
The density of each residents and guests in The Valley additionally helps cater to a variety of value factors from low cost retailers to luxurious manufacturers. La Plaza Mall in McAllen, Texas, for instance, has attracted retailers from H&M, Zara and Mango to Lululemon, Kendra Scott and Guess. In 2024, McAllen Mayor Javier Villalabos mentioned that town’s retail dominance broke information, noting that McAllen retailers earned $96.8 million {dollars} in gross sales tax revenues for town— shattering its all-time gross sales tax file.
Grocery, eating and leisure have additionally discovered methods to serve the rising inhabitants comparable to by way of area of interest grocery shops with specialised choices. The truth is, a number of eating places who’ve expanded within the space have mentioned they’re a few of their highest gross sales and greatest margins wherever within the nation. For instance, Baker Katz represents Darden Eating places—a nationwide chief within the full-service restaurant trade—who has considerably expanded within the Rio Grande Valley and skilled progress for a number of eating ideas comparable to Yard Home, Olive Backyard, LongHorn Steakhouse and Cheddars.
As with all market, understanding the competitors—such because the extremely aggressive grocery and mid-tier eating within the space—is necessary when seeking to set up a presence in Rio Grande Valley. Additionally, companies should issue within the logistics of cross-border purchasing, comparable to packaging elimination practices, to scale back necessary taxes.
One other consideration when retailers need to enter the market is that success within the Rio Grande Valley usually is determined by ensuring choices are tailor-made to the native client base. Bilingual advertising, culturally related branding and group engagement are all necessary concerns in the direction of constructing a client base within the space.
General, for retailers prepared to look past outdated perceptions of what border cities appears like, the Rio Grande Valley is a market that has confirmed it is stuffed with alternative. The area has a various and constant buyer base, sturdy cross-border commerce and foot site visitors in addition to record-breaking retail gross sales.
Jason Baker is principal at Houston-based Baker Katz, a full-service business actual property brokerage agency.
