Consumer & Retail
The UK is famous for an economy built on the behaviour and choices of its consumers.
In the short term we may find that inflationary pressures on households and pressure on savings limit the attractiveness of discretionary consumer products and services for investors and acquirers.
However, in the longer term the underlying drivers in the economy such as a massive shift to e- and m-commerce, concerns about ethics and sustainability, the rise of delivery services, a focus on health and wellness, affordability, experiences rather than things, localness and the impact of influencers will generate opportunity and growth for many volume B2C businesses, and these will be of continuing interest to investors, funders and acquirers.
While we may expect appetite for investment or acquisition of casual dining businesses to decline amongst mid-market PE, there may be a compensating focus on experiential businesses where no investment in real estate or leases is required. At the same time Food and Drink businesses which appeal to the health and wellness narrative are likely to do well. The consumer purse will always be an attractive place to focus, albeit we can expect a very selective M&A market during 2023.
HMT’s credentials
The HMT Team has a clear understanding of what acquirers and investors will look for in terms of KPIs and how B2C businesses are likely to be valued in the market. Scale, growth, resilience, business model and margin are all likely to be areas of focus and while there is a definite pay off between pace of growth and profitability.
In the short term, investors are unlikely to back B2C businesses that are not at or very close to profitability unless there are significant mitigations. Our recent credentials include advising businesses in the following sub-sectors
- B2C services
- Food & Drink
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