What: U.S. immigration restrictions are shrinking the labour force, raising costs, and destabilising the retail sector.

Why it is important: The shift highlights how immigration and policy changes are directly impacting retail workforce dynamics, pricing, and long-term competitiveness, as documented in recent Notion analyses.

America’s abrupt move toward zero net migration is fundamentally altering the retail landscape. With the border effectively closed and new barriers for both low- and high-skilled migrants, the sector faces a rapidly shrinking labour pool just as the native workforce ages. This has immediate consequences for retailers, who are already reporting the lowest holiday season hiring since 2008, along with a surge in layoffs and store closures. Labour shortages are driving up wages and operational costs, forcing companies to accelerate automation and adopt leaner, more flexible workforce models. At the same time, consumer confidence is plummeting, discretionary spending is contracting, and retailers are passing higher costs on to shoppers, further dampening demand. The crackdown on skilled migration and foreign students threatens the talent pipeline that fuels retail innovation and digital transformation, while demographic shifts complicate demand forecasting and inventory planning. As a result, the industry is being forced to prioritise resilience, scenario planning, and technological adaptation to maintain competitiveness in an increasingly volatile and unpredictable environment. 

IADS Notes: The sharp shift toward zero migration in the United States is already reverberating across the retail sector, as evidenced by the lowest levels of holiday hiring since 2008 and a surge in layoffs and store closures reported by Forbes in September and March 2025. Retailers are contending with a shrinking labor pool, heightened competition for frontline talent, and rising wage pressures, as detailed by ERE Media in June 2025, all exacerbated by aggressive immigration restrictions and tariff-driven cost increases highlighted by Forbes in October and March 2025 and CNBC in July 2025. These pressures have forced companies to overhaul their workforce strategies, accelerate automation, and adopt leaner inventory and supply chain models. They are also grappling with declining consumer confidence and contracting discretionary spending, as reported by The Robin Report in September 2025. The resulting market stagnation and operational uncertainty have led to cautious sales forecasts, price hikes, and a fundamental rethinking of talent management, with only a minority of retailers successfully integrating AI and upskilling initiatives to offset the loss of skilled migrant labour, according to MAD and BCG in June and September 2025. As the consumer base shrinks and economic volatility persists, the sector’s ability to adapt through resilience, scenario planning, and technological innovation will be critical to maintaining competitiveness and stability in an increasingly unpredictable environment (Forbes, Visa, and The Robin Report, March–October 2025).

Welcome to zero migration America