What’s Driving Retail M&A in 2025?

Retail mergers and acquisitions (M&A) are rising in 2025, powered by technology, shifting consumer demands, and the need for scale. After a subdued period, global deal activity is bouncing back. Retailers are capitalizing on this momentum to strengthen their digital capabilities and expand market reach. To succeed, they must navigate regulatory scrutiny, harness artificial intelligence-driven efficiencies, and embrace strategic adaptation.

A Rebounding M&A Market

M&A activity is picking up after lagging in prior years. In 2024, global deal activity on Datasite rose 12 percent, while North America increased by 11 percent year-over-year (YoY). Consumer and retail M&A were significant contributors to these gains. Consumer deal launches in the Americas jumped 15 percent in 2024 compared to 2023, spurred by lower inflation, evolving shopping behaviors, and AI-powered innovations. This trend has accelerated into 2025, with consumer deal launches on Datasite climbing 20 percent in the first two months of this year compared to the same time last year.

Scale Matters More Than Ever

Consumer and retail companies are using M&A to achieve scale quickly and efficiently. In an industry where margins are tight and consumer loyalty is fickle, scale enables cost efficiencies and operational flexibility. Companies that streamline operations and integrate acquisitions seamlessly will hold a competitive edge. Simultaneously, consumer and retail companies are assessing their portfolios and selling off noncore assets, product lines, and subsidiaries that do not support their long-term strategic goals. Last year, one oil and gas company sold its convenience stores to better align with its commercial (rather than retail) customer.

Another theme in consumer M&A is a continued focus on add-on acquisitions. This strategy can be an effective way for organizations to close geographical, channel- or product-specific gaps. For example, just this month, a large beverage maker agreed to acquire a specialty drinks company to capture part of the consumer shift to fitness and lifestyle products and to address unmet consumer needs.

Related story: Increased Confidence is Lifting Consumer M&A

The focus means that competition for the right assets is intensifying. To remain competitive, companies and dealmakers must find ways to streamline the M&A process. Enter AI.

AI is transforming M&A, improving speed, accuracy and decision-making. For example, AI-powered tools can streamline due diligence, automate repetitive tasks, and identify potential deal targets faster than traditional methods.

A majority of dealmakers recognize AI’s potential. In 2024, 66 percent of global dealmakers said generative AI tools would be a top area of operational focus this year, citing key benefits such as increased productivity.

While some industries face uncertainty due to shifting trade policies and tariffs, retail remains resilient. Businesses are adjusting to evolving regulations rather than pausing transactions. The key is preparation — anticipating longer review processes, maintaining transparency, and leveraging technology to expedite approvals.

What’s Next for Retail M&A?

M&A is no longer an optional growth strategy; it’s a necessity. Private equity firms need to realize returns on aging investments. Corporations must evolve, and acquisitions provide a direct path to transformation. The question isn’t if M&A will happen, it’s when.

To thrive in this fast-moving landscape, retailers must prioritize deal readiness. In 2025, retail M&A is defined by resilience and reinvention. Companies that embrace change, invest in technology, and execute deals with precision will emerge as industry leaders.

Mark Williams is chief revenue officer for the Americas at Datasite, a leading SaaS platform used by enterprises globally to execute complex, strategic projects.