Beauty M&A Shines Amid 24.2% Consumer Deal Volume Drop

Consumers trade down in price, not in performance Despite inflation and wage pressures, U.S. households remain relatively healthy: consumer net worth rose 49.7% between Q2 2020 and Q2 2025, while the Consumer Price Index increased 25.2% over the same period.

Lower-income shoppers have faced tighter budgets as wage growth for the bottom 25% of earners slowed from 7.2% in early 2023 to 3.6% in August 2025, prompting closer scrutiny of discretionary spending. That tension is reshaping category mix rather than killing demand.

Mass-market beauty sales grew 4% year over year to $34.6 billion in H1 2025, while prestige sales growth cooled to 2% to reach $16 billion.

Consumers are trading back into masstige and mass, but they are not lowering their standards: 63% say premium beauty is not necessarily higher performing than mass products, and 56% of beauty leaders expect perceived value to be the dominant theme shaping the sector in the coming years…