6
2014marks Portugal’s return to growth after a period of
three years of economic contraction and is the first in
which signs of recovery, albeit at a slow pace, begin to
be seen. In this regard, the tendency to exit recession
via the still relatively unsteady recovery of Portuguese
private consumption was confirmed.
The positive signs were especially important as they
showed domestic demand growth which enabled the
Group’s performance to improve. Indeed, during the
three preceding years of contraction of the economy,
the Group sought to adjust costs to the lower activity
levels, resulting in a more flexible cost structure which
in 2014 assured significant leveraging of profitability
due to higher turnover.
Phenomena that begin to be structural contributed to
that change, such as increased attraction of foreign
tourists, a trend that continued to gain firmer ground
in recent years. Another aspect of 2014 was the fact
that private consumption’s recovery was positively af-
fected during the summer period by unstable weather
conditions very favourable for the increase of shopping
centre traffic.
That favourable change of context experienced over the
course of 2014 enabled sales to improve in most con-
cepts, were the highest growth was seen in the counter
concepts.
But the year continued to be marked by the level of
disposable income, still low, andby high unemployment,
which affected consumers’ behaviour, causing changes
to their decision-making process, more complex and se-
lective, with different habits and consumption rhythms.
We continued to apply the policy of remodelling our
restaurants and consolidating operations in order to
guarantee the best consumers experiences.
The restaurant VAT rate remained high in 2014, which
put pressure on the sector’s profitability. Most of the
sector operators could not pass on entirely to consumer
prices, and this had negative practical effects onmargins.
Standing out negatively in this regard is postponement
of the necessary lowering of restaurant VAT to improve
competitiveness in the sector. But on a positive note
it is also important to mention the strong increase in
efforts to combat the parallel economy, specifically via
the “e-factura” programme, which has been creating fair
Introduction
