Retail M&A is Doing Fewer Deals, With Bigger Checks

While dealmakers aren't stepping back from consumer mergers and acquisitions (M&A), they are getting more selective. New data from KPMG shows deal value jumped 52 percent in 2025, even as deal volume fell 7 percent. Early 2026 looks similar. New global consumer deals in the first two months of the year fell 6 percent year-over-year on Datasite, which facilitates about 19,000 deals annually. Since these are deals at inception rather than announced, it can provide a good indication of what’s ahead.

Right now, the message is clear: companies still want growth. They just want it with fewer moves and cleaner logic.

Make the Deal Count

In the last few years retailers learned that growth that doesn’t improve margins doesn’t last. Freight shocks, wage pressure, and higher rates exposed weak models fast. Leadership teams now want assets that change the curve. This can translate into buyers moving toward larger, strategic bets that increase scale, while lowering unit costs. In hospitality, this can mean buying density and distribution, then standardizing systems and procurement. In consumer goods, it could mean buying a product line that can travel across channels.

Activists Are Forcing Focus

One of the reasons for this shift is shareholder activism. Activists are asking for better deals. They're pushing for portfolio rationalization, sharper capital returns, and clear accountability by business line. That pressure makes management teams prune sooner, and it changes when they transact.

This might lead some companies to clean up their business by selling off smaller brands, leaving markets that aren’t worth the effort, and splitting up real estate from their main operations if it helps them increase shareholder value.

As a result, there may be fewer big deals that can change a company’s direction. Activists can also speed up the process. When a board sets a plan, they usually set a deadline, which moves deals up and can make the right assets more expensive.

Consumer Behavior: Value, Experience and Efficiency Matter

As companies rethink their strategies and activists push for smarter deals, it’s equally important to acknowledge that the broader economic environment is also influencing who can buy and what’s worth buying.

Banks want to see solid proof before they lend. This means buyers with strong finances and clear plans to combine businesses get the advantage. It also means that companies with steady, reliable cash flow are more attractive than ones with big promises that may take years to pay off. At the same time, some businesses will be forced to sell, yet it doesn’t always mean there will be bargains.

Additionally, while consumers are still spending, they’re being more choosey, selecting cheaper options in some areas and splurging on others, especially for stand-out brands. Convenience and unique experiences also matter. In this climate, investments that make a business run better, such as speeding up deliveries, improving inventory accuracy, boosting profits per sale, and keeping technology simple, are especially valuable.

What it Means for Buyers and PE in 2026

For strategic buyers, there will be more competition for a smaller set of high-quality assets. To be successful, companies need to plan ahead and decide which parts of their business they should own and which ones they can share or work on with others. They also need to stress-test synergies and plan integration before signing.

For private equity, the playbook is shifting, not disappearing. Firms are likely to conduct more targeted outreach and careful evaluation of the financial health and stability of businesses before investing. Brands that are able to keep their prices steady and retailers that can operate efficiently will be in the best position to succeed.

The numbers from KPMG and early 2026 deal starts from Datasite show that the market rewards conviction. Do fewer deals. Make them strategic. Pay for what matters. In consumer, retail, and hospitality, the winners in 2026 will be the ones that treat M&A as a tool to reshape the business, not just to grow it.

Mike Sabutis is senior vice president of sales at Datasite, a provider of virtual data rooms for M&A dealmaking.