Do cities such as Porto and Lisbon experience a August "shutdown" for summer vacation where many local cafes, restaurants and shops are closed as residents head off for vacation? I know this phenomenon is seen in France and Italy but wasn't sure if it applied to Portugal?

good question - topping for Portuguese experts to notice. But even if so like in those other places would rarely affect tourist that much I should think.

Only the tradicional places. In August you do not find locals, but probably you just want to hit the popular places, and those are hopen.

When we visited Porto and Lisbon in August there was a noticeable throng of tourists - mostly Europeans - but we did not encounter closings of local businesses. A couple uber drivers joked that the locals were in the South for annual vacation but we saw no problems with accessing even mom and pop places in either Porto or Lisbon.