Consumer Deals in 2023: Delivering value through consumer M&A in challenging market conditions

Consumers across the globe are facing a now well-established cost-of-living crisis – where high inflation, coupled with increasing interest rates and low economic growth are causing consumers to be careful with their purse strings.

While it may have been supply shortages and pent up demand from covid which sparked the initial rise in inflation, prices of basic commodities skyrocketed when the conflict in Ukraine commenced in 2022.

As consumers have become more cautious about their spending patterns, and debt markets have become more conservative, M&A activity has reduced.

We consider the following four factors to have played a leading part in these low volumes:

1. The price gap between seller and buyer expectations
2. Nervousness in debt markets driving costly leverage models
3. Economic circumstances introducing risk to asset financials 
4. Uncertain consumer behaviours and low confidence

In this paper we explore the impact these factors have specifically within the consumer deals in 2023 – and what the outlook for H2 is.