Stress to the system - M&A trends in consumer and retail

With price increases still a nagging consumer concern, the C&R sector experienced a dramatic decline in M&A activity in 2022 compared with the robust dealmaking of the previous year. Deal value for the year fell to $115.3 billion, a decline of 52.1 percent compared with 2021, and deal volume dropped from 3,233 transactions in 2021 to 2,486 deals in 2022, a decline of 23.1 percent.

Full-year consumer transactions fell by 25.9 percent by volume and 53.1 percent by deal value compared with 2021. Retail deals fell 20.5 percent by volume and 51.1 percent by value.

Some notable trends in 2022 included:

• There was one mega deal over $10 billion in the C&R sector: the $24.6 billion announced acquisition by supermarket chain Kroger of rival Albertson. 
• Despite having more than $1 trillion in assets waiting to invest, private equity firms stayed mostly on the sidelines, with PE deal value falling 58.7 percent.
• KPMG analysts said the prime motivation for M&A deals in the sector in 2022 was strategic portfolio assessments to determine which units might be sold.

M&A trends in C&R are expected to remain soft until the timing of a recession becomes clearer and the Fed indicates when it might begin to lower interest rates.

For the latest market trends and KPMG deal professionals’ view of what may lie ahead, download our full 2022 report.