Deals Activity: Low
Restructuring Activity: Very high
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
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.
- 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
Dom Carter is Interpath Sector Leader for Consumer Markets. This includes Retail as one of three core segments. Dom 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