Portuguese Market Insight

PORTUGAL

Portugal’s economic situation is getting harder everyday with inflation rate reaching 10.2%, something that hasn’t happened since 1992. Retailers, brands and customers are dealing with a new reality trying to fight the ‘perfect storm’. Despite all of this, there’s also good news in October with the latest Statistics Portugal report pointing out that the economy grew by 0.4% in the third quarter compared to the previous one and the GDP registered a yearon-year rate of change of 4.9%. With the interest rates reaching 2% the government approved a move that forces banks to renegotiate real estate credit agreements with clients when they reach the effort rate limit. Retailers are concerned because of the inflation rise and the international economic crisis due to war in Europe. With customers purchase power increasingly reduced they fear a decrease in Fall/Winter sales. Stores located in Portugal’s coastal areas where tourism is stronger manage to maintain a positive average of sales, unlike those located in more remote spots that depend only on Portuguese customers are having more difficulties facing this scenario. This season collection has a similar situation to what happened in Spring 22. Due to production and transport issues late order deliveries slowed down the consumption because summer stock had already run out which harmed sales. There were stores that didn’t have stock to make the usual sales season in early September. Another reason is that we had summer time in Portugal until October 15th with temperatures around 28 degrees which slowed down the demand for warmer clothing. As we use to say in Portugal, sometimes there are bad things that come for the good and while some retailers complained about the Fall 22 order delivery delays, those who still had Spring stock took the opportunity to get rid of the last items before the new apparel collection hit the store. In the surf market at the end of October there are stores with full stock of wetsuits that haven’t felt the Fall demand yet. The water temperature is still cool so they’re not certain if that’s the reason or if it’s because of economic issues that makes surfers

have a second thought before buying a new one or SPAIN UK FRANCE maybe keep the one from previous Winter. In terms of skateboarding there are stores with excess stock GERMANY of hardgoods due to sales slowdown. Apparel has ITALY registered positive sales compared to technical gear. SWISS In both markets stores and customers feel the rising prices in several products and also on apparel. ManelSport is a surf/skate shop that opened its doors in 1990 in Santa Cruz beach located between Ericeira and Peniche being one of the first stores of its kind in Portugal. They have footwear, apparel and surf/skate hardgoods from brands such as Volcom, Carhartt, Dickies, Billabong, Rip Curl, Element, Vissla, Vans, Globe, Santa Cruz, Independent, Cariuma, Etnies, Fallen and Vonzipper. Between the end of summer and beginning of autumn the reality was different. “We had a positive end of summer, there was an increase in surfwear sales and given the location we have close to the beach we ended up having that point in our favour”, said the store owner, Carlos Dias. However, at the beginning of autumn the scenario changed. “We felt a certain sales stagnation. We already had polar jackets on display and people were still walking around in their boardshorts and bikinis. Now everything is back on track and sales are close to those we had one year ago”, he assured. Demand for skateboarding products also had a break over the past couple of months in this store. Although they did not have serious problems with order delivery delays they felt that some brands had trouble following the plan. And the product price increase is something to always take into account. “There was an increase of approximately 10% we observed at the national level. But perhaps because customers are also aware of the situation the demand keeps going and is understood by most of them.” For this Fall/Winter ManelSport are giving priority to skateboard hardgoods, street and work wear brands to complement surfwear. Despite the difficult scenario in the country and internationally, Carlos keeps a positive thought. “We already count that inflation will affect all businesses but even so I think the surf/skate industry is solid and will continue moving forward”, he concluded.