Retail M&A: Resilient and Strategic in 2H 2025

Retail mergers and acquisitions (M&A) are waking up in the second half of 2025, setting the stage for a busy turn to 2026. The deal landscape reflects a new mix of optimism and caution.

Inflation, Rates and Consumer Mood: The Big Variables

Retail M&A has spent the past year dodging curveballs from inflation and fluctuating interest rates. Inflation has cooled in many countries, but higher prices still pinch shoppers. Retailers are watching consumer behavior shift as shoppers hunt bargains, trade down to private label, and buy around key promotional periods.

Interest rates, while stabilizing, remain above pre-pandemic levels. This adds extra scrutiny to any new deal. Borrowing costs are still a concern, and lenders are pickier with their terms. As a result, buyers and sellers are taking longer to close deals, often negotiating over price and structure to reduce financial exposure and bridge valuation gaps.

Macroeconomic Pressure: Reshaping Deals and Buyer Behavior

Big-picture economic uncertainty, from tariffs to fresh regulatory hurdles, means dealmakers are more cautious. Buyers now ask for tighter due diligence and stronger warranties. Earn-outs and contingent value rights are common. Private equity firms and strategic buyers want deals that let them scale or add new capabilities, but most want to avoid big surprises after closing. The average deal now takes longer to close and more are going on hold as conditions shift.

The Digital Race: M&A as a Shortcut to AI and Personalization

Yet retailers are still chasing deals. Why? To win the digital and artificial intelligence race. M&A lets retailers fast-track digital upgrades, especially AI-driven personalization such as smarter recommendations, dynamic pricing, and hypertargeted marketing. This is evident on Datasite, which facilitates close to 19,000 new deals annually and where new technology, media and telecommunications (TMT) deals led activity in North America in the first half of 2025, up 16 percent year-over-year (YoY), followed by consumer, of which retail is part, up 9 percent YoY. Since these are deals at inception, rather than announced, it provides a good indication of what’s ahead.

Agentic AI has become a high-priority acquisition target, particularly for firms looking to leapfrog competitors in automation and intelligent decision-making. In fact some retailers have gone all in on platforms that use AI to tailor experiences across every channel. For both brick-and-mortar and online players, bolt-on acquisitions of tech firms or digital-native brands are at the top of the list.

International Buyers: Bargain Hunting in the US

Global players see opportunity. International buyers, especially from Asia Pacific, are taking advantage of valuation gaps to scoop up U.S. assets, while some U.S. retailers are looking abroad for new markets as a hedge against domestic volatility.

What Should Dealmakers Expect as 2026 Nears?

Looking out to the second half, retailers should expect fiercer competition for digital-first assets, more deal scrutiny, and a continued focus on tech integration, especially AI.

Retail M&A is on the move again, but the playbook has changed. Success now means adapting fast, thinking digital, and structuring deals that protect against future shocks. In a market that rewards bold, informed moves, those ready to seize the moment, while managing risk, will thrive.

Mark Williams is global chief revenue officer for the Americas at Datasite, a leading SaaS platform used by enterprises globally to execute complex, strategic projects.