Consumer Retail & Services Report

PitchBook clients can access the full report and Excel data pack via the Research Center on the PitchBook Platform.

Tariffs and consumer bifurcation keep dealmaking under pressure into year-end

Consumer retail & services PE dealmaking slid further in Q4 2025 as elevated tariffs, uneven consumer demand, and underwriting uncertainty continued to sideline sponsors. Deal volume fell 16.3% QoQ to 113 transactions, extending a four-quarter contraction and pushing annual activity to the lowest level since 2014. Deal value declined in tandem to $25.2 billion, reinforcing the sector’s lag relative to a rebounding broader PE market flush with dry powder and benefiting from rate cuts and tight credit spreads.

Persistent tariff uncertainty has reshaped both consumer behavior and sponsor strategy. Value-seeking households pulled back on discretionary categories, pressuring apparel, home goods, and automotive activity, while higher-income consumers continued to support restaurants, travel, and premium experiences. Sponsors responded by favoring minority investments and growth equity over leveraged buyouts, with growth deals climbing to nearly 40% of consumer retail & services PE deal count as investors prioritized scalable brands with pricing power, repeat purchase dynamics, and margin resilience. Despite record holiday sales driven by price inflation and select megadeals elsewhere in PE, consumer assets largely missed the rally—setting the stage for a cautious, policy-dependent outlook for the sector in 2026.

Consumer retail & services PE dealmaking slid in Q4 2025 as tariffs and uneven demand sidelined sponsors, pushing activity to decade lows and leaving the sector behind broader PE markets.