Portugal is expected to record the highest growth in retail sales in Europe in 2025, with a projected increase of 4.8%, according to Savills’ European Retail Report 2025.
The national performance surpasses Luxembourg (4.4%) and Czechia (4.1%) and confirms the resilience of the Portuguese market in a context of European recovery.
The report predicts a gradual recovery in European retail sales, supported by falling inflation and still high savings levels.
After five years of reduced average growth (0.8% per year), Savills estimates a real average expansion of 2.0% in 2025, followed by 1.7% in 2026 and 1.9% in 2027, approaching pre-pandemic levels, although with consumers more selective and attentive to price and quality. Until 2030, average annual growth is expected to be around 1.8%.
Portugal stands out for its combination of resilient domestic consumption, tourist dynamism and improved disposable income, factors that strengthen demand in cities and the attractiveness of retail.
In contrast, the largest economies in Western Europe show more restrained rhythms: Germany (2.7%), France (2.3%) and the United Kingdom (0.8%), with Italy recording a slight contraction (-0.1%).
The study also highlights the decisive role of tourism — with Europe remaining the world’s leading destination — and projects an increase of around 8% in foreign arrivals by 2025, boosting traffic and sales in urban commercial areas.
In the lace market primeSavills has recorded an average appreciation of 8% since 2022, with the luxury segment growing by around 14%, which mass market close to 9% and shopping centers and retail parks around 4%. In the last year alone, rents in high street rose 2.5%, in shopping centers 1.8% and in retail parks 0,5%.
Investment in retail is expected to recover, with volumes estimated at around 35.5 billion euros in 2025 — 5% more than in 2024 — and a preference for transactions in retail parks and shopping centers, given the scarcity of available prime assets.
The report also identifies a new wave of international brands — especially in the sports/athleisurehealth and beauty, restoration and leisure — and predicts that limitations will once again stock over the next five years will lead to a reinforcement of asset requalification, greater flexibility of uses and integration of ESG criteria.
José Galvão, Head of Retail from Savills, highlights the role of tourism as “one of the main drivers of growth in the Retail sector in Portugal. This study also demonstrates that the socio-demographic changes underway in Europe will have a direct impact on commercial activity, and will be decisive for the emergence of new retail concepts and formats”, he adds.