Portugal Market Insight – Winter 2025. Economy continues to face significant challenges
Although the government has announced an increase in the national minimum wage to €920 by 2026, and Portugal has been named “Economy of the Year” for 2025 by The Economist, the population continues to face significant challenges. These include a 25% surge in housing prices (the highest in the European Union), rising food inflation, and increasing fuel costs. Purchasing power remains low, with the country ranking 18th among EU member states. The OECD forecasts that Portugal’s economic growth will accelerate in 2026, rising from 1.9% in 2025 to 2.2% next year, followed by a slowdown to 1.8% in 2027.
G3 Store Surf Center in Peniche is one of the stores feeling the effects of seasonality. “Since November, in-store traffic has entered a much quieter stage,” said one of the partners, João Carinhas. “Sales are around 10–15% lower than last year, but this comes as no surprise. With the end of the high season and the departure of tourists, it is perfectly normal for sales to drop sharply. This is the usual cycle of our market—seasonality is part of the business in Peniche,” he explained.
Online retail has also played a role in this scenario. “We’re feeling the increasing weight of the online market. This is a trend that has been intensifying and inevitably takes some customers from physical stores to digital channels. That said, we believe personalized service and the experience of seeing and handling products in person remain our key differentiators and help balance the scales,” he added.
In terms of products and brands, “heavier jackets have been selling more slowly. Their higher prices, combined with more cautious consumer behaviour, mean customers think twice before investing in higher-value items. When it comes to brands Volcom and Salty Crew continue to be the clear favourites among our customers, delivering the strongest sales performance in-store. These brands have built a strong connection with our clientele and, regardless of the season, remain the number-one choice for visitors,” he noted.
To adapt to this environment and maintain momentum, the store’s strategy focuses on strengthening its presence on social media. “The goal is to share authentic content with real photos of our products and immediate visibility of ongoing promotions. We want our followers to know exactly what we have in-store and to feel that, despite the convenience of online shopping, it’s worth stopping by to take advantage of the opportunities we’re offering,” he said.
Meanwhile, the Xen&Co Surf Shop located in Cascais has reported positive results, largely driven by its strong online presence, which has translated into increased store traffic. “The past few months have been positive in terms of sales. By investing heavily in social media content, we increased the visibility of both the store and the brand, which led to a higher number of customers. We made podcasts with the local community and reels focused on surfboards, both of which contributed to sales growth,” said the store owner, Xenico Vidal.
There has also been a shift in strategy regarding wetsuits. “I reduced the amount of hardgoods in the store, especially wetsuits, due to unfair competition from some brands that sell directly on their websites at prices lower than the wholesale prices offered to retailers,” he stated.
On the other hand, “there has been increasing surfboards sales this year, both new and second-hand in good condition. Working with the best Portuguese surfboard brand, Semente Surfboards, and the best Brazilian brand, RM Surf Designs by Ricardo Martins, has delivered strong results. Long-term, solid partnerships are a win-win situation and add value to the business,” he emphasized.
Regarding apparel, “I think people are somewhat tired of the major surf brands, which is why we’ve also seen a slight increase in sales of our own brand. I didn’t run a Black Friday campaign, only aligned with the actions taken by our partners. With just one week to go before Christmas, customers appear more restrained in their spending.
Nuno Princepe
