Foot Traffic to Small Businesses Plunged After Last Year’s ICE Raids, Owners Say It Never Really Came Back

When Melchor Moreno looks back to June 2025, he remembers the empty streets outside his restaurant, La Chispa de Oro, a traditional Mexican eatery on Cesar E. Chavez Avenue in Boyle Heights that has been a staple for more than 30 years.

Neighboring businesses closed early or sometimes didn’t open at all. One weekday, he made just $500, hundreds short of covering his overhead.

Even after the raids slowed, the business never bounced back, Moreno said. “People still have it in the back of their mind that ICE may come at any time or any minute and streets are not back to normal like they should be,” Moreno said.

“You can see that businesses are not the same, especially for restaurants. Even a year later.”

The economic fallout from increased immigration enforcement over the last year has hit independently owned restaurants and retail businesses hardest, especially those in communities with Latino immigrants, Spanish speakers, and noncitizen workers, according to the LA County Economic Development Corporation (LAEDC). Even a rumor of ICE activity can restart the cycle.

Business owners selling skateboards, records, and supplements have noticed fewer people walking through their doors. With many businesses still recovering financially from the COVID-19 pandemic or wildfire impacts, and now grappling with tariffs and increased fuel costs, the economic chill from the raids could alter industries across Los Angeles for years.

“Economists love to pretend like they have a crystal ball,” said Shannon Sedgwick, vice president of research at LAEDC, “but I think one of the most damaging things to our economy related to any kind of federal policy shift that has been taking place lately is the degree of uncertainty that surrounds it all.”

Soon after the raids began, the LA County Board of Supervisors asked LAEDC to study the economic impacts. LAEDC estimates undocumented workers are responsible for about 17% of the county’s economic activity.

Of 178 small businesses interviewed, 82% said they were negatively impacted by the raids, citing reduced daily sales, decreased customer traffic, or changes to their workforce. Some of the most vulnerable areas include Westlake, Echo Park, Boyle Heights, and southeast LA cities such as South Gate, Pico Rivera, and Bell.

Fifteen of the businesses interviewed had closed by December 2025.

“It’s that unsettled climate of fear that’s really impacting people’s activity and, as a result, our economic activity,” Sedgwick said. “If that uncertainty, unsettled feeling, and fear about what’s happening subsides, then this will kind of shift back.

But in the interim, we’re already seeing some of the fallout.”

At Leo’s Tacos near Venice Boulevard and Vermont Avenue in Pico Union, manager Maria Martinez said business is still down about 30% after dropping significantly last summer. The truck has tried to avoid passing on financial strain to customers.

“The people who are afraid don’t walk around the same anymore, they don’t circulate the streets like they used to,” she said in Spanish. Not even the FIFA World Cup, expected to bring more than $892 million in economic activity to LA, has reversed reduced foot traffic for some small businesses.

Luis Sanchez, who sells jerseys and sports apparel at Sports in Westlake, said sales have remained flat over the past six months. “In other years, you could already see the increase around this time,” he said.

“But because of the raids, things haven’t been the same.”

Along the El Salvador Corridor, street vendors say ongoing fear continues to shape their daily lives. Mirna Lopez, who runs Cocteles Acajutla selling ceviche, said sales are still about half of what they were before the raids.

She used to make around $400 a day but now doesn’t reach $200. “I don’t bring as much anymore, just what I think I might sell, and even then I still don’t sell it all,” she said in Spanish.

Sergio Jimenez, a senior community organizer with Community Power Collective, said the downturn cannot be separated from years of economic instability. “It’s been a really tough four years for vendors,” he said, pointing to the pandemic, inflation, rising housing costs, and the raids.

At La Chispa de Oro, Moreno was forced to cut hours for employees at the peak of the raids and now plans to permanently alter business hours to save. In East LA, Herbs of Mexico, a longstanding herb and supplement shop, saw a 75% reduction in business last summer, according to owner Martin Lopez.

He described the impacts as a “pile-on” that exacerbated unsteady business from tariffs, inflation, and fuel price hikes. “We’re getting squeezed in a lot of different ways,” Lopez said.

He has laid off staff, ordered fewer products, and spent his own money on supplies. He reported some return of business but is still making 30% less than in summer 2024.

“One person can say one thing, and then it just spreads like wildfire on social media,” Lopez said. “And then we don’t see anyone come in because they said, ‘I saw something here at this corner.’ And then that entire region just shuts down.”

County entities have activated services for impacted business owners. LA County departments produced resource guides and a business resiliency fund.

In CD 14, Councilmember Ysabel Jurado created the Ysabel Jurado Microenterprise Grant Program, providing up to $3,000 in direct relief. The LA County Department of Economic Opportunity launched a Small Business Resiliency Fund in September 2025, granting $5.4 million to more than 1,300 businesses countywide.

“It hasn’t gone away. Initially, the flashpoint and the severity of it was very in your face.

But it doesn’t mean that it’s not happening still,” Sedgwick said. Lopez worries about what crisis could be next.

“If another event surfaces from this administration, it’s going to continue to pile on and put other businesses at risk for failure and bankruptcy,” he said. Near his shop, a market and a retail store have closed for good.