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Portugal Market Insight: Surfing through Uncertainty. Hopes Up for Stability as Retailers Battle Economic Headwinds.

Portugal is hoping to find a much-desired political stability that will allow the government to work smoothly, but the task hasn’t been easy. Despite progress in solving problems and making important decisions such as the country’s new airport location, the stress test of the new executive elected 100 days ago, will come in October with the approval (or non-approval) of the State Budget for 2025. At that point, we will either have a period of greater stability or we will once again have a political crisis with the possibility of early elections on the horizon again. 

According to the European Commission, the Portuguese economy is expected to grow by 1.7% this year, which is an upward revision compared to the 1.2% published on the Winter Forecast. By 2025, Brussels predicts that Portugal’s GDP will grow by 1.9%, driven by private consumption and investment. After rising in May, the year-on-year inflation rate fell again in June to 2.8%.

Overall, the boardsport industry is struggling due to a tourism slowdown related to action sports and weather instability. Although Portugal’s overall number of tourists continues to break records, the surfing/skate target has been shrinking or opting for other destinations so retailers have felt this hit in sales.

For Manelsport, which has stores in Santa Cruz and Torres Vedras in Portugal’s West region, “The positive aspect continues to be a good trend in surf and skate lifestyle with Portugal receiving more and more surfers throughout the year, especially at surf camps”, commented store owner, Carlos Dias. “The negative side has been the weather and the wetsuit and surf, skate market saturation.”

In his words the new Spring/Summer collections reception has been good. Supporting surf and skate events has also helped the store along with their team of 20 riders. “The brands that stand out are Carhartt, Dickies, Volcom, Cariuma and New Balance. These are alternative brands that have developed good products and exclusivity. In terms of skateboarding hardgoods, we have Jart that supports the best Portuguese skater, Gustavo Ribeiro”. Regarding the impact on sales, Carlos commented, “We are at the same point as last year despite the difficulties with the weather and the slowdown in tourism. We have a big problem with the crisis throughout Europe. Also, the big textile brands start their promotions in May and fortunately the surf shops only start in July. But the strongest sales months are precisely in July and August, when the market is already sold out. It would be very important for the stores to unite and only have sales campaigns in August. I think from now on it will get better, people have hardly been to the beach this year”.

For Wavegliders, a core brand and surf shop in Ericeira, the year hasn’t started as well as they’d hoped. “The industry is going through a difficult time”, said the store owner and shaper, Nico. “This year has been worse in terms of sales by around 15% to 20% compared to 2023 and we didn’t reach our goals. But despite the difficulties and the slowdown in tourism, the business continues to move forward. With the Roark and Rhythm collections, we achieved the desired sellout, but Carhartt fell short. The boards that are having the most success in terms of sales are midlengths and longboards”, he mentions.

To face the situation, adaptation is the key word. “We always have to do sales campaigns, although this isn’t a common practice in our store due to the type of tourist customers in Ericeira who have purchasing power and are here for a week on vacation. But there are other types of customers who are looking for discounts. That’s why we ran a sporadic campaign to sell off old boards and replace them with new ones”. The upcoming times will be very important. “In general, there’s a slowdown in consumption and we still have overstock that goes back to the Covid-19 days. The economic crisis, the Euro 2024 and now the Olympic Games have led many people to travel or stay at home to watch it. Let’s see if people return to the beach to save our summer sales, but I have serious doubts… Let’s wait and see. But if we can’t recover by the end of this season, next Fall/Winter is likely to be even worse”, he predicts.

Fingers crossed that the remaining summer season will bring good news and nice deals for everyone.

By Nuno Principe