Consumer Markets – Retail

Increased discretionary spending with consumers has also increased the number of competitors in the sector. With an intensified number of competitors, wholesale outlets and e-commerce channels are taking market share. This rise in competition has put pressure on the sector’s revenue. In addition, growing competition from online retailers is expected to place further price pressures on industry operators. Improved consumer spending and disposable income, however, will encourage consumers to spend more at retail stores, which will offset some of the declines. To effectively compete, operators will target niche luxury consumers or expand their outlet store presence. Retailers have also offered big discounts and promotions to drive foot traffic to their stores and strengthen consumer loyalty.

 

Value of Closed Domestic M&A Transactions ($mm)

 

Sector Performance vs. National GDP

The Consumer Market - Retail sector is anticipated to continue to contract in the future as competition increases. An increased market presence of e-commerce companies and larger retail companies will result in accelerated revenue declines for the sector. E-commerce entities are operating more efficiently, undercutting traditional department store prices and offering a larger selection of products. Retail companies require high-traffic retail space and sales associates to operate. Additionally, larger retail companies will offer specific products that smaller operators are unable to. The consolidation in the Consumer Markets – Retail sector will follow, enticing many larger operators to engage in M&A activities.

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