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

Abstract

Manuscript type: Research paper
Research aims: This study aims to examine the impact of supply chain
integration on sustainable performance in the Malaysian retail sector.
It specifically investigates the role of supply chain resilience and the
principle of circular economy as mediators in the relationship between
supply chain integration and sustainable performance.
Design/Methodology/Approach: Data were collected from 110 large
retail firms in Malaysia and analysed using partial least squares structural
equation modelling (PLS-SEM) with SmartPLS 4.
Research findings: Both supply chain resilience and principle circular
economy 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 the
relationship between supply chain integration and supply chain resilience.
Furthermore, mediation analysis confirms that supply chain integration
influences sustainable performance indirectly through supply chain
resilience and principle circular economy.
Theoretical Contribution/Originality: This study extends the existing
literature by incorporating mediators, namely supply chain resilience
and principles of the circular economy. It also supplements the literature
on sustainable performance by providing empirical evidence on circular
economy practices from the perspective of the retail industry.
Practitioner/Policy Implication: The findings of this study highlight that
sustainable performance in today’s disrupted environment depends not
on integration alone, but on retailers’ ability to reconfigure integrated
supply chains into resilient and circular systems that can withstand
uncertainty and resource scarcity. For policymakers, the findings indicate
that policies promoting sustainability and circular economy practices
should be complemented with initiatives that support supply chain
capability development.
Research limitation/Implications: Since this study adopts cross-sectional
research designs, the results may not be able to capture the dynamic
evolution of supply chain integration, resilience and circular economy of
retailers over a specific time frame.