Provided you’re not interested in fruits and vegetables (in which case you want the mercado on the south end of Estelí [1]), the entire length of Avenida Principal is lined with boutiques whose shop girls might whistle and catcall to entice you into their stores softly asking “¿Que busca, amor?” (“What are you looking for, my love?”) as you walk by.
Estelí is the place to buy handmade leather goods like belts, saddles, and cowboy boots: Find them all along the southern half of Avenida 1 SO. A pair of quality cowhide boots (or deerskin or snakeskin, the latter of which might get confiscated at your home customs office) go for about $60-100 and take a week to make when custom fit to your foot. Order a pair on your way north and pick ’em up on the way back to Managua.
Two shops—Artesanía La Esquina (one block north of the cathedral, tel. 505/2713-2229) and Artesanía La Sorpresa (one block south of the cathedral, tel. 505/2713-4456)—each have a huge selection of Nicaraguan arts and crafts from all over the country.
In general, prices are cheaper in the Managua [2] and Masaya [3] markets, but for locally produced items, like soapstone carvings and Ducualí pottery, these are good places to shop. Artesanía La Sorpresa also has a small section with herbal medicines.
Café Luz, the sister restaurant to Hostel Luna, the only hostal in Estelí [1], has a number of talented local artists selling their arts and crafts products. Casa Estelí near the Tip Top on the Pan-American highway is another interesting location for buying your unique Nicaraguan souvenirs.
The tiny Librería Leonel Rugama (on Ave. Principal, across from the Kodak) is a bookshop run by the famous poet-martyr’s parents. Rugama’s dramatic death at the hands of Somoza’s National Guard is legendary: Cornered in a building in Managua, the young soldier single-handedly held off a contingent of guardsmen while Carlos Fonseca escaped through the sewers. Ordered to his knees by the Guardia, he was commanded, “¡Rindase, Sandinista!” (“Surrender, Sandinista!”). Rugama retorted, famously, “¡Que se rinda tu madre!” (“Let your mother surrender!”) before he was shot.
Otherwise, Mocha Nana has a small English language bookstore, where no one has to surrender at all.
Links:
[1] http://www.moon.com/destinations/nicaragua/esteli/city-esteli
[2] http://www.moon.com/destinations/nicaragua/managua
[3] http://www.moon.com/destinations/nicaragua/masaya/masaya-city