Retailers under pressure to grow can be tempted to focus on the next initiative, technology investment or expansion opportunity. But sustainable performance depends less on isolated improvements than on whether the business has the underlying capabilities to perform consistently, adapt to changing conditions and support sustainable growth.

That is a central theme in the third e-book in a series, which unpacks Grant Thornton Australia’s 2026 Retail Dealtracker and examines how retailers can build the capabilities that support stronger performance, resilience and long-term value.

The research identifies five interconnected capabilities that can help retailers strengthen performance, resilience and long-term value: Customer proposition, earnings quality, operating model, technology, and organisational capability. 

For retail executives, the challenge is not necessarily to invest in all five at once. It is to understand where capability gaps are constraining performance and prioritise the changes that will have the greatest impact.

“The priorities will vary by retailer, but the common theme is building a business that can perform consistently in a more complex environment,” says Tam Goldin, Partner – Financial Advisory at Grant Thornton Australia.

“For many retailers, this means strengthening the fundamentals: a clearer customer proposition, better use of data and insights, stronger operational discipline and an operating model that can support growth without adding unnecessary complexity.”

Start with the customer

A strong customer proposition remains one of the most durable sources of retail value. However, in a market where consumers are increasingly focused on value, retailers cannot assume awareness translates into preference.

Australia Post’s FY26 Q4 eCommerce Update found that 59 per cent of consumers never pay full price, while 46 per cent are willing to switch retailers for a better deal. At the same time, 32 per cent say they are becoming more price conscious. 

That makes differentiation more commercially important – and potentially more difficult.

The most useful measures are not necessarily traditional brand metrics. Retention, repeat purchase, full-price sales and customer lifetime value can provide a clearer picture of whether customers have a genuine reason to choose and return to a retailer.

The proposition also cannot sit solely with marketing. It influences product, pricing, customer experience, channel strategy and operational priorities. Retailers need to understand what customers value, then translate that insight into decisions the wider organisation can consistently deliver.

Protect earnings, not just revenue

Revenue growth alone tells retailers little about the quality of the underlying business. Strong earnings quality depends on the ability to convert sales into sustainable earnings through pricing discipline, cost management and an operating model that can adapt when conditions change. 

That requires visibility beyond the headline profit and loss. Inventory, returns, customer acquisition costs, working capital and loss prevention can all affect the quality and sustainability of earnings, and provide a clearer view of how repeatable current performance is.

Shrinkage, for example, is one area where operational capability can directly affect performance, particularly for retailers with large store networks or high-footfall locations. Workforce productivity is another area where retailers need to understand how labour is deployed, particularly as workforce expectations and wage settings continue to evolve.

The objective is not simply to cut costs. It is to understand where value is created, where it is being lost and how the operating model can be strengthened without compromising the customer proposition.

Know when the business has outgrown its current structure

Growth can expose weaknesses that were less visible when a retailer was smaller. Processes that worked when decisions were concentrated among a founder or small leadership team may not provide the foundation needed as channels, geographies, suppliers and customer segments multiply.

Kirsten Ridgway, Partner – Management Consulting and Head of Retail at Grant Thornton Australia, says the biggest opportunities often emerge when a business has “outgrown its current ways of working”.

“This may involve simplifying processes, improving how decisions are made, strengthening supply chain capability, improving workforce productivity or better aligning investment with customer priorities,” she says.

“The opportunity is often less about one major initiative and more about creating greater connection between strategy, operations and execution.”

Embedding these capabilities requires more than new processes. Clear decision rights, reliable information and accountability help ensure the operating model can support growth while maintaining customer relevance and operational control.

That is particularly relevant to supply chains, where changing demand, variable lead times, freight costs and inventory expectations are increasing the need for visibility and flexibility. The appropriate model will differ by retailer: some may benefit from deeper supplier relationships or vertical integration, while others need diversification and flexibility. 

Technology is an enabler, not the strategy

Retailers have more data and technology at their disposal than ever, but more tools do not automatically produce better decisions.

This e-book emphasises that technology should begin with the business problem. Three areas where technology can strengthen business capability are customer insight, operational efficiency and decision-making – from understanding customer lifetime value to improving demand forecasting and using AI to support ranging, pricing and workforce decisions. 

The foundations matter. Reliable point-of-sale systems, integrated inventory, connected customer data and clean financial reporting provide the consistency that more advanced AI applications depend on.

As Ridgway describes: “The starting point should be understanding where the business has the greatest opportunity to improve, with technology acting as an enabler rather than the starting point.”

Build capability before it becomes urgent

Ultimately, stronger retail businesses are not built by chasing every improvement opportunity simultaneously. The capabilities explored in this e-book are interconnected, and strengthening one area can create the conditions for improvement elsewhere. They are built by identifying the capabilities most critical to the strategy, assigning clear ownership and embedding the resulting changes into everyday operations.

That includes organisational capability. Processes cannot depend indefinitely on a founder, individual specialist or spreadsheet. As retailers scale, clear decision rights, reliable information, consistent operating rhythms and accountability become increasingly important. 

Goldin stresses that the timing of that investment matters.

“The businesses that create long-term value are typically those that invest in capability before they need it – strengthening the foundations that support future growth, resilience and strategic flexibility.”

For retail leaders, the message is simple: Resilience is not a single project, but rather the result of building the capabilities to make good decisions, execute consistently and adapt as conditions change. 

• For a deeper understanding of the capabilities that help retailers build resilience, strengthen performance, and create long-term value, download the third e-book here.