Deal activity in the consumer and retail sectors is increasingly defined by fewer transactions but much larger deal sizes, as companies and investors become more selective about where they deploy capital. Rather than pursuing a high volume of smaller acquisitions, dealmakers are focusing on transactions that can deliver long-term strategic value, reshape portfolios, or provide scale in a challenging economic environment.
This shift reflects ongoing macroeconomic uncertainty, including uneven consumer demand, margin pressure, and cautious financing conditions. While interest rates and inflation have shown signs of stabilizing in some markets, buyers remain careful. As a result, many are prioritizing deals that offer clear synergies, operational efficiencies, or access to strong brands with loyal customer bases.
Data from recent industry reports shows that overall merger and acquisition volumes in consumer and retail have declined year over year, while total deal value has increased. The rise in value has been driven by a limited number of large, high-profile transactions, including brand acquisitions, carve-outs, and take-private deals. These larger transactions are offsetting the drop in smaller, incremental deals that were more common in previous years.
Private equity firms continue to play a central role in this environment. Many funds are sitting on significant amounts of undeployed capital and are under pressure to invest, but they are doing so more carefully. Instead of spreading investments across numerous smaller targets, private equity sponsors are concentrating on fewer platform investments that can support add-on acquisitions, operational improvements, or brand repositioning over time.
Brand management companies are also active, particularly in fashion, lifestyle, and consumer goods. These firms are drawn to established names with strong intellectual property, global recognition, and licensing potential. In several cases, deals are structured to separate brand ownership from operations, allowing companies to focus on asset-light models while partners handle manufacturing, distribution, or retail execution.
Within fashion and apparel, dealmaking has slowed in terms of volume, but the transactions that do move forward tend to be more strategic. Buyers are targeting brands that can be revitalized through better supply chain management, improved digital engagement, or expansion into new markets. At the same time, weaker or undifferentiated brands are finding it harder to attract interest, particularly if they lack scale or a clear path to profitability.
Beauty and personal care have remained relatively resilient compared to other consumer categories. While deal activity has moderated, the sector continues to attract strategic buyers and investors drawn by strong consumer loyalty, repeat purchase behavior, and long-term growth potential. Many acquisitions in this space are centered on premium positioning, wellness-focused offerings, or brands with strong direct-to-consumer capabilities.
Retail technology and digital capabilities are also influencing deal strategies. Acquisitions that bring advanced data analytics, e-commerce infrastructure, or omnichannel expertise are seen as especially valuable, as companies look to better understand consumer behavior and improve operational efficiency. These capabilities are often viewed as essential for long-term competitiveness, making tech-enabled targets attractive despite broader market caution.
Another driver of larger deal sizes is portfolio reshaping by established companies. Many consumer and retail groups are divesting non-core assets to sharpen their strategic focus, while simultaneously acquiring businesses that align more closely with their long-term goals. This has led to an increase in carve-out transactions, where specific brands or business units are sold rather than entire companies.
The move toward fewer, bigger deals also reflects a longer-term mindset among buyers. With growth harder to achieve organically, acquisitions are being used as tools for transformation rather than simple expansion. Buyers are placing greater emphasis on due diligence, integration planning, and realistic synergy assumptions, which can lengthen deal timelines but improve execution outcomes.
Despite the slowdown in deal count, competition for high-quality assets remains strong. Well-positioned brands with consistent cash flow, strong margins, or clear growth narratives continue to attract multiple bidders, supporting valuations at the top end of the market. In contrast, assets without a compelling strategic story are seeing less interest and more valuation pressure.
Looking ahead, many dealmakers expect this pattern to continue into 2026. While an improvement in financing conditions could support increased activity, the focus is likely to remain on strategic, high-impact transactions rather than a return to high-volume dealmaking. Companies and investors appear committed to discipline, favoring deals that can deliver resilience and relevance in a rapidly changing consumer landscape.
Overall, the current M&A environment in consumer and retail underscores a clear shift in priorities. Success is no longer measured by the number of deals completed, but by the ability to execute transactions that strengthen brands, enhance capabilities, and position businesses for sustainable long-term growth.
