More than half of Portuguese consumers say their purchasing power has fallen over the past year, as the rising cost of living continues to squeeze household budgets.
A survey carried out by consumer association DECO, the Universidade Católica Portuguesa (Portuguese Catholic University) and supermarket chain Mercadona found that 53% of respondents reported a decline in purchasing power during the previous 12 months.
The study says the rising cost of living has been affecting households’ “purchasing power and economic well-being”, with perceptions of the past year “predominantly negative”.
Just 4% reported a significant improvement in purchasing power and 9% a slight increase.
By contrast, 38% said their purchasing power had fallen slightly and 15% said it had fallen significantly, while 34% felt their situation had remained unchanged.
The findings are based on a survey of 2,000 adults living across mainland Portugal.
Cost of living dominating concerns
The pressure is clearly feeding through into everyday spending decisions.
According to the study, 77% of consumers are highly concerned about the cost of living, while 68% say they now feel a greater need to control how much they spend.
Almost eight in 10 – 78% – say they have changed their purchasing behaviour at least to some extent as a result of higher living costs.
Consumers are responding by becoming more methodical shoppers.
Around three-quarters frequently compare prices, look for promotions and choose own-brand products, while more than 80% say they consider different options before deciding what to buy.
Only 12% say they frequently make impulse purchases.
“Consumers are adopting increasingly rational strategies to manage household budgets,” the study concluded.
Value for money has consequently become central to food shopping, with more than 90% of respondents saying it is important when choosing products.
Promotions also carry considerable weight: more than 90% value special offers, while 78% say they will travel to a particular shop to take advantage of one.
Supermarkets remain dominant
Large retailers continue to account for the overwhelming majority of grocery shopping.
Some 93% of respondents said they carry out more than half of their food shopping in supermarkets and hypermarkets, while 84% shop for groceries at least once a week.
Physical shops also remain the preferred way to buy goods generally, with more than 90% making most of their purchases in-store rather than online.
Consumers nevertheless recognise benefits to both.
Flexible opening hours were cited by 37% as an advantage of shopping online, while 39% highlighted speed as an advantage of shopping in physical stores.
Loyalty schemes are also firmly embedded in shopping habits, with 83% using cards or apps at least occasionally and 87% considering such schemes at least moderately worthwhile.
Sustainability continues to influence some purchasing decisions despite the financial pressure.
More than 60% say they check sustainability claims or ethical information on products, while 25% say they would be prepared to pay more for a more sustainable option.