Consumer Markets


Deals Activity: Low

Restructuring Activity: Very high

The retail sector remains under sustained pressure, with rising costs and intense competition weighing on profitability.

Deals activity in Retail

1. Deal count has remained broadly flat since 2018, except for a pandemic-related spike in Q1 2021.

2. We anticipate deal activity to remain steady in the short term as stronger businesses seek out opportunities to build scale in times of economic volatility.

Restructuring activity in Retail

Restructuring activity remains at ‘very high’, having remained at this level consistently for the last four years.

Given the cost-of-living pressures facing consumers, conditions are not anticipated to improve materially in the short-term.

Following the pandemic, many online retailers have struggled to maintain top-line growth. This issue is particularly acute for those retailers which in recent years have undergone high-value IPOs, as growth misses expectations.

The cost-of-living squeeze could prove problematic for big ticket operators such as those selling the likes of furniture, kitchens and electrical goods, where revenues are particularly vulnerable to falling consumer confidence.

Food retailers are facing significant input cost pressures from suppliers, plus there are additional difficulties arising from materially higher gearing in what is traditionally a low margin sector. This presents opportunities for discounters and white label suppliers to gain market share.

Given the current weak demand, retailers will no longer be concerned about a lack of stock from disrupted supply chains; rather, they will be worried about having too much stock on their balance sheet.


Retail in the UK continues to face the most significant and rapid change in half a century. Shifting consumer behaviour, complex supply chain issues and ongoing economic uncertainty calls for agility, strong cost controls and a focus on retailing fundamentals.

Oversight of supply chains is more important than ever in the aftermath of the pandemic and Brexit. Retailers need to be increasingly flexible and adaptable to supply chain issues, identifying potential problems early and taking mitigating actions to ensure availability of key lines.

Rising costs remains a critical issue. From energy and labour to transport and stock, the cost of getting goods to consumers has increased rapidly in recent months. Amidst a cost-of-living squeeze, passing on these rises in full is challenging, leading retailers to explore ways of mitigating uplifts and make operational savings.

A shift to online was a core economic feature of the pandemic, but there has been a steady return to bricks-and-mortar, cementing a hybrid retail model. This move affects retailers looking to 'rightsize' physical estates, making sure sites generate meaningful returns and using online/collection models to provide geographical coverage elsewhere.

Appetite to invest in the retail space appears to remain undiminished, with several major deals announced in recent months. Whilst UK retail is extremely mature, it’s also intensely competitive and innovative. Retailers with strong operational fundamentals will continue to be seen as takeover targets.

We’re also likely to see retailers taking major strategic decisions. Divestment of non-core operations, both horizontal and vertical acquisitions (either to increase market share or build supply chain control), and increased partnering relationships look set to become key features in the months ahead.

Key trends:

  • Continued shift to online from traditional bricks and mortar
  • International expansion is becoming an increasingly high priority for UK retailers
  • Discounters (food and non-food) continue to take market share
  • Importance of convenience as consumers expect a seamless ‘anytime, anyhow, anywhere’ shopping experience
  • Innovation is key to winning customers and maintaining sales
  • Choice, privacy and purpose will increasingly inform purchasing decisions
  • Strategic decisions likely to result in greater deal activity in coming months

High Street Fashion Retailer

Supported an international clothing retailer with over 600 stores across six countries and an ecommerce platform selling to over 100 countries to identify initiatives to rapidly reduce its cost base.

HMV Retail Limited

We were appointed administrators to HMV, the largest high street retailer of music and DVDs in the UK.

We traded 129 stores whilst seeking a sale of the business. Following extensive and complex negotiations, a sale of the business was achieved, preserving the majority of sites and almost 1,500 staff.

Find Your Expert

Will Wright is Interpath Sector Leader for Consumer Markets. This includes Retail as one of three core segments. Stuart Reid drives our approach to the Retail sector nationally, supported by Will Wright and a wider team of regional specialists. For a full list of our senior people with experience in this sector use the button below.

Our senior team