This study investigates how polycrisis-induced strategic shifts in Scandinavian retail chains affect their dynamic capabilities and interconnectedness with high streets, and the implications for city center resilience and revitalization. The research addresses a significant gap in understanding how retail chains strategically adapt to polycrisis challenges in ways that could contribute to city center regeneration. By integrating dynamic capabilities theory with systems thinking and a multi-stakeholder place lens, we develop a holistic framework for analyzing retail adaptation within broader city center ecosystems.

The study employs a qualitative longitudinal methodology, conducting 60 semi-structured interviews with 12 senior executives from seven Swedish retail chains across diverse sectors during 2020–2022. Using template analysis guided by sensemaking principles, we examined how retail chains developed collaborative capabilities in response to the evolving polycrisis conditions.

Our findings reveal three key adaptive strategies: cost-sharing initiatives (including condominium-style property management and joint logistics operations), innovation alliances (such as cross-industry knowledge sharing and flexible pop-up concepts), and recognition of interdependency with local environments. The study demonstrates that retailers exercise nonlinear capability development, fundamentally altering the temporal logic of adaptation by requiring concurrent rather than sequential learning, experimentation, and transformational processes. We identify a paradigm shift from firm-centric to place-oriented approaches, where retail capabilities are co-created and shaped by specific city center contexts.

The research contributes a novel ‘systems-based territorial capabilities perspective’ that operationalizes the synthesis of dynamic capabilities, multi-stakeholder collaboration, and systems theory. However, cultural inertia limits implementation, as retailers recognize their interdependence while not seeing them-selves as primarily responsible for placemaking. The study suggests that successful city center revitalization requires transcending traditional isolated retail roles through collaborative territorial development processes that cross-leverage community assets.