U.S. Faces Highest Inflation in Last 40 Years
The consumer price index rose to 8.6% in May, the highest 12-month percent change since 1981. The increase was broad-based, with prices rising across all sectors. Gasoline prices experienced one of the sharpest increases in the index, growing 48.7% from a year earlier. The prices for groceries also witnessed a significant jump, growing 11.9% over the same period. Five of the six major food groups in the grocery food index increased by more than 10%.1
Consumer Confidence Drops Slightly
Consumer confidence falls to the lowest level since February 2021 as high inflation, and rising interest rates continue to weigh on consumers, according to a survey by The Conference Board. The index, which measures consumers’ attitudes, buyer intentions, and consumer expectations for inflation, stock prices, and interest rates, fell 4.5 points from 106.4 in May to 98.7 in June. The second consecutive fall comes as consumers are getting increasingly concerned about inflation, particularly for food and gas.2
Markdowns To Come as Retailers Attempt To Shed Excess Inventory
Following two years of building inventory to curtail supply chain delays and meet strong consumer demand, big-box retailers are now faced with excess inventory amid a slowing market. High inflation and changing consumer preferences have slowed demand for industry products. Major retailers Target and Walmart have begun marking down products to free up inventory space and adjust to new consumer preferences. Apparel, furniture, and home goods are expected to see the biggest markdowns.3
Consumers Return to Brick-And-Mortar Stores
With e-commerce rapidly increasing in the past years in response to the pandemic, new findings from a report that tracks consumer shopping behavior indicate that consumers are returning to brick-and-mortar stores. The report, published by 5WPR, found that more than half (52%) of consumers prefer finding new products in-store compared to online. The findings are consistent with the U.S. Chamber of Commerce’s research that shows consumers are returning to local shopping in droves.4
Largest Transactions Closed
- Houghton Mifflin Harcourt Company
- Veritas Capital Fund Management, L.L.C
- Golden Nugget Online Gaming, Inc.
- DraftKings Inc.
- Main Event Entertainment, Inc.
- Dave & Buster's Entertainment, Inc.
- Ryzac, Inc.
- Skillsoft Corp.
- Sheraton New York Times Square Hotel
- Island Capital Group LLC; MCR Investors LLC
- PGW Auto Glass, LLC
- OEP Capital Advisors, L.P.
- Jacobs Vehicle Systems, Inc.
- Cummins Inc.
- Operations in Mexico and The United States of Jafra S.A.
- Betterware de México, S.A.P.I. de C.V.
- The Confidante Miami Beach
- Sunstone Hotel Investors, Inc.
- Interbond Of America, Inc.
- Aaron’s Retail Solutions, LLC
Other Financial Buyer Transactions Closed
- Assets under Tires Now Operations and Certain Assets under Internal Tire Distribution of Monro, Inc.
- American Tire Distributors, Inc.
- All Assets of TutorMe, LLC
- Liminex, Inc.
- Opensalon Pro
- SOHAM INC
- Enovation Brands, Inc
- Italian Wine Brands S.p.A.
- Cygnet Online LLC
- Grove, Inc.
Other Strategic Buyer Transactions Closed
- Gurney's Newport Resort & Marina
- Pebblebrook Hotel Trust
- Bob's Stores, LLC/Eastern Mountain Sports, LLC
- GoDigital Media Group
- Adventure Forest LLC
- Suncap Limited
- Hotel YVE Miami
- RFR Realty LLC
- Goddard Systems, Inc.
- Sycamore Partners Management, L.P.
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes