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Portuguese Market: Summer Inventory Still On Shelves

The summer review in Portugal is very positive with thousands of people enjoying action sports as this was the first summer after Covid that we really felt the pandemic was over (for now…). Unrestricted surfing and skateboarding events, music festivals and parties took many people outside, celebrating life and feeling for the first time in two years that we finally have our lives back.
By Nuno Principe

Like all Europe, Portugal’s economy is facing difficulties because inflation continues to rise (in our last article we talked about 7.2% in April and currently in August it’s at 9%). The ‘perfect storm’ is here: essential goods, fuel and energy price rising joined by the bank’s interest rates going up cause the increase in house rents and instalments make the life of the Portuguese very complicated meaning a huge loss of purchasing power. When we look at this scenario in a country that has a minimum wage of only 705 euros it’s easy to understand the seriousness of the situation. Following the policies of fellow European countries, Portuguese government announced in early September a package of measures to support families and companies in the amount of 2.4 million euros adding to the 1.6 million previously allocated this year in a total of 4 million euros to face the crisis.

In the boardsports industry, this Spring/Summer we felt the hangover of two years of pandemic in which there was a never-before-seen demand for technical gear leading to out of stock issues. But in this “new normal” distribution chains are different and slower. Due to production problems and transport delays several retailers received Spring/Summer collection later than usual which harmed the regular sales season. This summer review points to a technical gear drop in sales compared to the summer of 21. The stores are full of stock of wetsuits, surfboards and skateboards having difficulties in selling the product as demand has slowed down in this segment. That’s why they have opted for discounts and promotions to get into Fall/Winter with space to receive this season’s new products.

As for apparel and shoes summer showed positive signs in terms of sales with several retailers restocking product. Due to the difficulties of selling to stores that have full stock, several surf and skate brands have chosen to make discounts and promotions on technical gear to persuade retailers to keep buying. Still there are retailers that forecast that only within one or two years they’ll be able to sell all the product they currently have in the warehouses. War in Europe, inflation and the contraction in Portuguese consumption are making retailers afraid of how this Fall/Winter will go down.

Secret Spot Surf Shop is a core shop with 24 years located in Portimão, Algarve. Their main business is technical gear for surf, bodyboard, skate and skimboard working with brands like Volcom, RVCA, Xcel, Roark, Billabong and Rip Curl, among others. As with many stores, they felt less demand for technical gear this season. “Summer was good for us sales-wise, still compared to last year the technical gear sales went down”, said the store owner, João Bernardino. “For us it was something predictable because many other stores are full of stock in Algarve’s west coast where there’s better waves in summer. From September onwards that’s the best timing for our business since the locals are more available to surf and the Fall swells start to offer good waves in the south coast.” This store also had issues with delay delivery of SS22 collection because of transportation. They had an apparel sales growth while shoes segment went in an opposite way. One of its best sellers is the new Volcom Modulator wetsuit that had a strong demand from clients but this segment is feeling the inflation effect. “We know prices will rise sooner or later and this inflation scenario isn’t good for anyone. Almost all brands have more expensive products right now but the price rise isn’t the same between them…”

Let’s hope the ‘perfect storm’ we’re living in, besides with all this concern and fear of what might happen this Fall/Winter, also brings us good waves. Stay strong everyone, we’re gonna make it. Cheers.