M&A activity was strong in 2025, marking the second-best year on record for both global and North American markets. Technology, industrials, finance, and healthcare remained at the forefront, with retail and consumer products sectors also seeing a lot of movement. On a full-year basis, total deal value in retail, consumer products, and hospitality reached its highest level since the pandemic-era peak in 2021.

Throughout the year, many retailers and consumer products companies focused on refining their portfolios through a two-pronged approach: exiting brands and businesses that lack scale or strategic fit while doubling down on strong brands and scalable platforms with clear competitive advantages. In 2025, companies across consumer markets increasingly pursued scale-driven M&A to improve resilience and unlock efficiencies amid ongoing cost pressures and increasingly value-conscious consumers, a trend expected to continue in 2026.

At the same time, the retail sector faced economic headwinds, including tariff uncertainty, margin compression from inflation, and shifting consumer demand for value. The ongoing transition to omnichannel retail also required major investment, making cash flows less predictable and influencing which companies attracted buyers.

Private equity firms executed several notable take-private transactions in 2025, reflecting the ample private equity dry powder available and the ongoing role of these investors in driving M&A activity.

Looking ahead to 2026, our outlook for M&A activity is optimistic yet cautious. Take-private transactions and selective brand acquisitions are expected to remain among the areas of focus, absent significant economic or regulatory headwinds. The political environment and evolving antitrust enforcement will also be important factors to monitor. Beyond these broader trends, several sector-specific dynamics are expected to shape retail and consumer products M&A in 2026, including the following:

• Megadeals and strategic consolidation will likely continue as companies seek scale and competitive advantage in an evolving market;
• Omnichannel integration is becoming more important, with retailers that combine strong online shopping and fast delivery standing out to buyers;
• More deals among direct-to-consumer brands may develop, as smaller players struggle with customer acquisition costs and larger platforms seek to add differentiated products to their portfolios;
• The adoption of AI and other advanced technologies is becoming a key differentiator, making tech-forward retailers more attractive M&A targets; and
• Finally, regulatory scrutiny surrounding large transactions may shape how deals are structured and which targets are pursued, especially for high-profile or transformational mergers.

Together, these trends reflect an industry rapidly adapting to shifting consumer expectations and an evolving competitive landscape. We will continue to follow developments in the retail M&A market and provide updates as conditions evolve.