Pingo Doce Owner Warns Fuel Crisis Could Force Consumers to 'Make Choices' as Margins Come Under Pressure

The head of Portugal's largest retail group sounded the alarm on Thursday about the cascading effects of the Middle East energy crisis, warning that the company's ability to absorb rising fuel costs has a limit — and that consumers may soon feel the pinch.

Pedro Soares dos Santos, chairman of Jerónimo Martins, which owns the Pingo Doce supermarket chain, told analysts and journalists at the company's annual results presentation that the group is currently absorbing the impact of surging fuel prices rather than passing them on to shoppers. But he set a clear deadline.

"Until the end of March we will have to know exactly where we stand on this matter," Soares dos Santos said. "Until then, companies have their own capacity to continue to control fuel costs. After that, we will see to what extent it is possible — or not — to hold."

A Different Kind of Crisis

The Jerónimo Martins chief drew a distinction between the current situation and the disruption caused by Russia's invasion of Ukraine in 2022. "Ukraine was, and is, the breadbasket of Europe," he noted. "But the Middle East is the breadbasket of fertilisers and the chemical industry."

While he ruled out supply shortages of the kind briefly feared during the early days of the Ukraine conflict, Soares dos Santos warned that the knock-on effects could be significant. Fertilisers "are already being purchased at a much higher price for the next harvest, and that could have an impact further down the line," he said. If fertiliser costs spike dramatically, food prices will inevitably follow.

The company posted strong 2025 results, with profits climbing nearly 8 percent to 646 million euros. But Soares dos Santos was candid about what lies ahead. "Maintaining margins in 2026 will be extremely challenging," he said. "If everything around a person's life — interest rates, fuel, social life — shoots up, people will have to make choices."

The IVA Zero Question

Asked whether the government should reintroduce the IVA Zero measure — the temporary suspension of VAT on essential food items that was implemented in 2023 during the last inflation spike — Soares dos Santos was notably ambivalent. Spanish rival Mercadona recently called on both the Portuguese and Spanish governments to adopt zero VAT on food.

"It has more impact on the consumer than on us," he said. "But it has good things and bad things — it rewards those who are well off and those who are not equally. I don't know if it's the most balanced and fairest measure for those who have least. I'm always torn on this."

The Bigger Picture for Households

The warning from Portugal's most powerful retailer comes at a sensitive moment. The Middle East escalation — driven by US and Israeli strikes on Iran and Tehran's response — has pushed energy prices higher across Europe, and Portugal has been particularly exposed. The government has already cut fuel taxes and announced new diesel subsidies for professional transport in an effort to contain the damage.

For the millions of people who shop at Pingo Doce, Recheio, and the group's other Portuguese operations, the message is sobering. Inflation in Portugal has been "practically non-existent" recently, as Soares dos Santos pointed out. But the forces building in the background — fertiliser costs, transport fuel, global uncertainty — could change that picture quickly.

For foreign residents and expats who have come to rely on Portugal's relatively affordable cost of living, the coming weeks may offer an early signal of whether that advantage is about to erode. The end of March, as the Jerónimo Martins chairman suggested, will be the moment of truth.