Building Sustainable Retailers: How Supply Chain Resilience and Principles of Circular Economy Drive Matter

Manuscript type: Research paperResearch aims: This study aims to examine the impact of supply chainintegration on sustainable performance in the Malaysian retail sector.It specifically investigates the role of supply chain resilience and theprinciple of circular economy as mediators in the relationship betweensupply chain integration and sustainable performance.Design/Methodology/Approach: Data were collected from 110 largeretail firms in Malaysia and analysed using partial least squares structuralequation modelling (PLS-SEM) with SmartPLS 4.Research findings: Both supply chain resilience and principle circulareconomy are found to significantly improve sustainable performance,jointly explaining 46.3% of the variance in sustainability outcomes.Surprisingly, this study found insubstantial evidence to support therelationship between supply chain integration and supply chain resilience.Furthermore, mediation analysis confirms that supply chain integrationinfluences sustainable performance indirectly through supply chainresilience and principle circular economy.Theoretical Contribution/Originality: This study extends the existingliterature by incorporating mediators, namely supply chain resilienceand principles of the circular economy. It also supplements the literatureon sustainable performance by providing empirical evidence on circulareconomy practices from the perspective of the retail industry.Practitioner/Policy Implication: The findings of this study highlight thatsustainable performance in today’s disrupted environment depends noton integration alone, but on retailers’ ability to reconfigure integratedsupply chains into resilient and circular systems that can withstanduncertainty and resource scarcity. For policymakers, the findings indicatethat policies promoting sustainability and circular economy practicesshould be complemented with initiatives that support supply chaincapability development.Research limitation/Implications: Since this study adopts cross-sectionalresearch designs, the results may not be able to capture the dynamicevolution of supply chain integration, resilience and circular economy ofretailers over a specific time frame.