Insight

C&R sector M&A declines with uncertainty about the economy

Both deal volume and deal values suffer from Fed’s interest rate moves

The Federal Reserve’s determination to rein in inflation by ratcheting up interest rates has cast a Siberian chill over the consumer and retail sector (C&R). Many C&R firms have scaled back planned M&A in response even though robust retail sales surpassed expectations, suggesting a recession this year is not inevitable.

KPMG economists said that the U.S. economy clearly has entered a period of volatility and contraction, but the strength of the consumer and industrial production mean the chances of an economic downturn lessened. M&A is more forward-looking, however, and many C&R firms have reduced plans for M&A until the economic picture becomes clearer.

U.S. C&R activity by sector

Within your industry, how strong is the appetite for M&A in Q2'22 as compared to 2021?


*Source: KPMG M&A Market Survey

Contributing authors

Sunder Ramakrishnan

Sunder Ramakrishnan

Advisory Managing Director, KPMG US

+1 212-739-6328
Sudipto Banerjee

Sudipto Banerjee

Principal, Pricing & Commercial Excellence Leader, KPMG US

+1-404-907-6173
Mike Musso

Mike Musso

Managing Director, Advisory, Consumer Products and Retail, KPMG US

+1 770-696-8441
Julia Wilson

Julia Wilson

ESG Strategy Leader, KPMG US

+1 404-222-3511
Kevin Martin

Kevin Martin

Deal Advisory Leader, Consumer & Retail, KPMG US

+1 571-635-4078