Roller coaster bridge
Roller coaster bridge

How can retail CEOs balance resilience with reinvention?

Authors

10 minute read 15 Sep 2026
Related topics
Retail

Retail CEOs are navigating competing priorities. Discover how leaders are turning resilience into a catalyst for future growth.

In brief
  • A return to stability is not guaranteed in retail, and planning for the unknown is becoming an operational mandate.
  • Retail leaders are looking to balance the demands of the current environment against future transformation needs.
  • Instead of seeing the two as opposing forces, retail leaders can use resilience today to support reinvention tomorrow.

With the summer months now behind us, retail leaders hopefully found some time to reflect on the year so far, and on what might lie ahead. Strategies, budgets and financial reporting may be defined by fiscal years, and success, in retail, can be anchored on the holiday shopping season that marks the end of the calendar year.

However, over the last few months there has been a lot for retail leaders to take stock of. Turbulence is no longer a temporary period to navigate through. Instead, disruption in a nonlinear, accelerated, volatile and interconnected (NAVI) world has created a new normal. Geopolitical volatility, persistent cost pressures, fragile supply chains, regulatory divergence and rapid technology changes, especially in artificial intelligence (AI), are reshaping the economics of retail. Consumers are becoming more price- and value-conscious but also more demanding in their expectations of convenience, purpose and experience. As the latest CEO Outlook study found, retail CEOs find themselves balancing so many needs that finding a clear priority can be difficult. 


Retailers should ask themselves a series of questions to balance these competing priorities across two distinct needs – protecting performance today and delivering success tomorrow. Today’s needs might depend on cost, discipline, growth, productivity, customer trust, supply chain resilience and affordability. Longer-term priorities are more transformative and will depend on scaling AI, redefining stores, building new business ecosystems, diversifying revenue streams and finding new ways to measure success. But these should not be considered competing demands. Cost discipline and investment, efficiency, experience and value can be managed alongside one another as retail leaders move away from reactive strategies toward building more adaptive organizations.

Female owner checking inventory in supermarket
1

Chapter 1

Today: protect performance and remain relevant

Current priorities for retailer leaders lie in balancing the cost pressures brought by geopolitical and supply chain volatility with investing for growth behind new technologies and customer loyalty.

1. How do we sustain profitable growth amid economic volatility?

67%
67%
of retail leaders see geopolitical tensions, instability and conflicts as one of the top two business risks they face over the next 12 months.
82%
82%
of retail leaders are confident in their ability to drive cost discipline across their organizations by optimizing their operating models.

The immediate challenge facing retailers is sustaining growth in an environment defined by geopolitical and macroeconomic uncertainty. Input costs, energy prices, labor availability and supply chain disruption are all continuing to put pressure on margins. Consumers are becoming more price sensitive as expectations of higher inflation and interest rates grow. 

Many retailers are shifting from traditional scaled growth models such as opening new stores toward more focused, value-driven strategies. This means streamlining portfolios and reallocating capital to more profitable areas of the business such as private label, marketplaces, retail media and loyalty programs. M&A or divestments can support these strategies, but only where there is a clear benefit.

2. Where will technology investments deliver the most value?

43%
43%
of retail leaders see enhancing technology or AI capabilities as a key factor in their investment and M&A strategies in the coming year.
80%
80%
of retail leaders are increasing their planned AI investments in 2026 compared with 2025 levels.

Technology investment remains a top priority, but the emphasis is shifting rapidly from experimentation and pilots to scale and integration. After years of fragmented digital programs, retailers are focusing on using AI to consolidate internal processes and working with technology partners to create a unified view of inventory, pricing, operations and customer data.

Financing is hard to come by in lean times, especially given the costs associated with updating legacy systems. But appetite for investment in AI tools remains strong among retail leaders, especially through collaborations with technology platforms. AI can deliver new growth but can also provide cost-saving solutions across the enterprise, by resolving some of the challenges presented by legacy systems through the delivery of cleaner data and common architecture. 

3. How do we maintain and grow customer loyalty and trust?

86%
86%
of retail leaders are confident about the growth prospects for the sector overall in the coming year.
76%
76%
of retail leaders are confident in their ability to build trust with robust risk controls to address geopolitical, AI, cyber and compliance concerns.

Customer loyalty has always been hard to earn and easy to lose. Rising acquisition costs, proliferating channels and declining brand loyalty present challenges to retailers who are seeking to maintain relevance across increasingly fragmented consumer segments. Shoppers have more choice, more channels and less patience with bad service. On the flip side, retailers have more data and more ways to engage customers than ever before. Loyalty programs are moving from transactional points-based into much more integrated initiatives that can offer more personalized rewards, subscriptions, services and experiences.

As retailers seek to monetize loyalty, they are also leaning into trust as a competitive advantage. For retailers, there are three imperatives in building trust. The first is to maintain the right degree of security to prevent data breaches, which represent a growing concern for retailers. The second is for data to be used transparently and responsibly, with customers increasingly scrutinizing how retailers might deploy the first party data they capture for commercial use. The third is to create a perception of shared value through the capture and use of data so that customers can see tangible rewards in the form of cashback, linked discounts or exclusive offers and perks.

4. How do we redesign supply chains for speed, resilience, and flexibility?

77%
77%
of retail leaders are confident that they can improve supply chain resilience by using data, analytics and AI to build transparency and manage volatility.

The bottlenecks and geopolitical shocks the world has seen since 2020 have firmly exposed the fragility of networks built primarily for cost and scale, moving supply chain management from the back‑office to the boardroom. Retailers are now redesigning supply chains for speed, transparency and resilience, diversifying suppliers, reviewing sourcing geographies and investing in visibility across the value chain.

AI-enabled forecasting, demand sensing, RFID, digital product passports and traceability tools are helping retailers reduce stockouts, avoid excess inventory and comply with new regulatory requirements. Resilience is increasingly being treated as a competitive lever, rather than a risk management exercise.

5. How can we balance expectations of price with purpose?

59%
59%
of retail leaders agree that customer tastes are polarizing, which will squeeze mid-market brands.
20%
20%
of retail leaders see ESG and sustainability as a top three factor shaping acquisitions or divestments in the coming year.

Consumers want affordability, but many still expect retailers to act responsibly on sustainability, transparency and waste. For some consumers, this may mean that sustainability considerations have been deprioritized in favor of financial concerns. However, factors such as sustainability have the power to increasingly influence purchasing decisions, particularly among younger cohorts who often want retailers to behave more sustainably without charging a premium to do so.

Leading retailers are responding by exploring how sustainability can extend their value propositions rather than viewing it as a cost that needs to be passed on. Waste reduction and renewable energy programs demonstrate their ability to mitigate against rising energy and commodity costs. Meanwhile take‑back programs, resale platforms, refurbishment programs and circular business models are allowing retailers to offer lower‑cost options while extending product lifecycles, or develop new revenue streams in second-hand, subscription or repair services.

Shop owner holding tablet
2

Chapter 2

Tomorrow: building the next operating model

As retailers look to the future their priorities are evolving to focus on extracting new value from alternative revenue streams, existing assets and the integration of AI across the enterprise.

1. How will AI unlock measurable, enterprise‑level returns?

80%
80%
of retail leaders are confident in their ability to scale the responsible use of AI and customer data across functions.
77%
77%
of retail leaders are preparing for a wave of agentic commerce where humans increasingly delegate buying decisions to AI agents.

Looking ahead, based on the confidence leaders have in scaling AI use, it is apparent that retailers view AI as integral to their future business infrastructure rather than a functional bolt-on technology. The next frontier will come from deploying AI to orchestrate pricing, inventory, procurement, fulfilment and customer engagement in near real-time. Agentic systems will increasingly be able to reason, plan and act across multiple processes, transforming productivity and accelerating decision-making.

AI will also reshape demand. As consumers delegate more discovery, comparison and purchasing decisions to AI agents, retailers will need to compete not only for human attention but also for agentic preferences. Product data quality, trust signals and fulfilment reliability may overtake brand awareness as agentic commerce grows in influence.

2. What other sources of value can the store portfolio unlock?

84%
84%
of retail leaders agree that their store network will be transformed to better support cross-channel engagement models and deliver value beyond sales of products.

Despite repeated predictions of a retail downturn, the store is not disappearing. Instead, its role is changing. Physical retail will continue to generate sales, but future value will also come from the way stores can support services, fulfilment, experiences, media and community engagement. Retailers are rethinking stores as flexible assets that can serve different purposes depending on different locations and customer needs.

Flagship locations may focus on experience over product, while regional stores may support different needs based on their local context. These could include micro-fulfilment, repairs, rentals, events or healthcare services. While these represent relatively small revenue opportunities today, preparing store footprints for a multipurpose future will enable new growth opportunities, especially if they can support emerging retail media businesses by gathering new data from in-store activities and bringing better media targeting into physical spaces.

3. How will supply chains support a demand responsive ecosystem?

39%
39%
of retail leaders see supply chain and procurement as the areas where AI is currently delivering the most measurable enterprise-level impact in their business.

Future supply chains are unlikely to be linear. As retail moves from transactional supplier relationships toward collaborative networks, business ecosystems will benefit from shared data, aligned incentives and real-time coordination. Deploying interoperable technologies, notably through AI, will support end-to-end visibility and the autonomous execution of planning, replenishment. To deliver this successfully, retailers will not only deploy new technology solutions but also develop strong governance and partnership models that seek to strike a balance between control and collaboration across complex networks.

4. How will retail diversify beyond its core business for future growth?

70%
70%
of retail leaders agree that their business will see future profitable growth driven by non-core activities such as retail media, subscriptions, services or marketplaces.
52%
52%
of retail leaders believe that changing competitive dynamics are increasing competition from outside traditional retail.

Aggregate growth prospects for traditional retail categories are highly dependent on consumer sentiment. To secure a better future, retailers are seeking to expand their offering to support growth outside their core business model and tapping into higher growth adjacent areas such as wellness, media and technology, where growth prospects are stronger. This is leading to the development of blended product‑service offerings such as resale, rental, repair and subscriptions to increase customer lifetime value and reduce a sector-wide reliance on inventory‑heavy models.

Retailers are also looking to expand their business-to-business (B2B) offering, diversifying beyond targeted brand relationships to develop platforms and services such as marketplaces, shared infrastructure, and data‑driven solutions. Media, warehousing and logistics solutions are emerging as B2B growth engines that expand the value proposition.

This diversification brings new competitors as well as opportunities. As the overall business landscape shifts from asset ownership to platform orchestration, future success will become more dependent on a willingness to experiment with new business models that sit outside traditional retail activities.

5. How will retail redefine KPIs to deliver holistic, circular value?

33%
33%
of retail leaders see long-term growth priorities as one of the top three factors influencing M&A and divestment strategy.

How EY can help

As operating models evolve, so too will measurements of performance and success. KPIs have traditionally focused on tangible metrics such as sales per square meter, footfall, traffic and conversion rates. However, as retailers look to unlock more holistic value between business interdependencies, they will seek new ways to capture and measure long‑term value creation.
 

Retailers are already beginning to incorporate metrics around trust and customer lifetime value alongside financial indicators. AI‑enabled workforce productivity measures and new feedback loops will also help to balance efficiency with employee experience and service quality.
 

Underpinning this change will be new measures of how retailers can capture and deliver societal value as regulators and customers push for environmental and social outcomes. New metrics could see success measured by resilience and reputation as much as growth and margin.

Balancing today’s efficiency with tomorrow’s reinvention

Retail has always proven to be a resilient sector, adapting to cycles of disruption and stability. But in the current climate of disruption, retail leaders cannot rely on a return to stability, certainly not in the form they expect. Nor can they afford to chase every technology or growth opportunity without discipline. With so many priorities to occupy them, retail leaders will need to be ruthless in defining where they see value creation opportunities and where they should remove complexity. They should also use today’s challenges to build the talent, technology and collaborative relationships that will help them deliver moving forward. Finally, and most importantly, retail leaders must keep a laser focus on how to maintain and grow trust with their customers as new risks and engagement opportunities emerge. Rather than creating more noise, the priorities of today can lead to sharper strategic choices that enable engines of growth for the future. 

Summary 

Retail leaders face a new era of persistent disruption, where economic pressure, AI, supply chain risk and shifting consumer expectations must be managed together. To remain competitive, they need to protect margins, build trust, improve resilience and invest selectively in technology, talent and partnerships. Longer term, growth will come from scaling AI, reimagining stores, expanding into adjacent services and measuring value beyond traditional retail metrics.

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Related topics
Retail

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