Retail M&A sinks in 2022

Deal values and volume dropped sharply in consumer and retail M&A in 2022, according to Refinitiv data.

Why it matters: Tighter financing, rising interest rates and shifting consumer behavior coupled with challenges in supply chain management and inflation made companies in the sector less desirable targets.

By the numbers: Retail deal values fell 48% to $121.6 billion over 2021.

• Diving deeper, deal value in the consumer products and services sector fell 44% while values in consumer staples fell 37%.
• The number of deals was also down, with a 24% dip in the retail space, a 14% decline in consumer products and services, and a 19% fall in consumer staples.

Yes, but: Notably, the discount and department store retailing sector and the household and personal products sector bucked the trend.

• Deal values climbed 158% in the discount and department store sector year over year, and increased nearly 56% in the household and personal products sector.

💭 Our thought bubble: The value placed on budget-friendly and products-out-of-necessity companies suggests that investors are betting that consumer patterns will shift as the economy turns tides.

Zoom out: Global deal value and volume were down 38% and 18%, respectively, in 2022 versus 2021, Axios’ Dan Primack writes.