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Portugal Market Insight: Elections, and The Rise Of Environmentally Friendly Options

Portugal is a box of surprises. In just three and a half years, Portugal is heading for its third general election in May, making it impossible for the country to achieve faster and more consistent development. In the context of the international crisis and the struggling European economy, it’s easy to understand that this situation was the last thing Portugal needed at the moment.

The economy is feeling anxious due to this new and unexpected political crisis Despite this, the Bank of Portugal (BdP) predicts that the Portuguese economy will grow by 2.3% this year, slowing down to 2.1% and 1.7% in 2026 and 2027, respectively. This forecast is more optimistic than the 2.1% forecasted by the government. As for inflation, the BdP estimates that it will slow to 2.3% this year and stabilise at 2% over the next two years.

At Christmas, there were retailers who were able to make significant sales through stock clearance sales. Apparel and hardgoods have been more successful while footwear has had some difficulties. The January/February sales season saw less traffic in-store due to the Christmas hangover and the low tourism season. March was surprisingly unpleasant, with rain every day and fewer customers coming into the stores. The new political crisis has created even more uncertainty, mistrust, fear and instability, leading to a decline in consumption. The commercial war on the horizon due to Trump’s tariffs have left retailers wondering what’s to come, and there’s a sense of apprehension in the air as they wait to see how Europe’s leaders will react.

Surfers Lab, which has stores in Peniche, Costa de Caparica and the Algarve, says that “the sales performance between December and March evolved with significant variations over the period. In December, there was a slight increase in sales, possibly due to the seasonality associated with Christmas. However, this momentum slowed in January and February, reflecting a typical consumer slowdown at the beginning of the year. From mid-March, the upward trend resumed with a gradual and steady recovery, albeit with fluctuations.” Softboards and ecological products have been the rising stars of product trends. “Rather than identifying individual products as ‘more fashionable’ or ‘less sold’, what we’re seeing is the consolidation of very clear consumer trends that are in line with the current customer profile. Firstly, softboards continue to stand out as one of the categories with the most consistent growth. This type of board has been winning over not only beginners – due to its safety, stability and ease of use – but also more experienced surfers, who seek them out for their playful and versatile components. The possibility of surfing even in less favourable conditions means that softboards are becoming an increasingly popular choice. This is a trend that began in previous years but is now clearly consolidated. At the same time, there is a growing demand for environmentally friendly products, especially wetsuits made from sustainable materials and technical and lifestyle clothing with environmental certifications. This change is directly linked to growing environmental awareness among consumers, who are looking for brands and products with a lower environmental impact, valuing responsible practices throughout the production chain. On the other hand, higher-value products, such as high-performance surfboards or top-of-the-range technical equipment, showed a slower and more thoughtful sales dynamic,” they explained.

Spring has just arrived and the store is ready for the new season. “With the arrival of Spring, there’s usually a gradual increase in demand for products related to surfing and beach lifestyle, driven by the better weather conditions.”

At Bana Skate Shop, one of the oldest core stores in Portugal, “Sales have generally been lower than last year,” they mention. “In January, February and March, sales were actually really weak..” Faced with this reality, you have to know how to adapt. “In our store we have better sales in apparel and some technical skateboarding gear. Footwear sales are becoming weaker. Before Christmas we ran a Black Friday campaign and after Christmas we ran promotions. However, we always have a corner of the store with promotions all year round with old collections. We have to be positive and think that it will get better and that the economy will stabilise. And of course, Easter is coming, which is usually a good time for sales.”

By Nuno Principe