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Amid growing consumer and societal expectations for environmental responsibility, this study examines how retailers’ sustainability practices drive customer loyalty through the mediating role of retailer legitimacy and the moderating role of consumer scepticism. Drawing on legitimacy theory, the objective of this study is to develop and test a conceptual model linking sustainability practices, corporate reputation, retailer legitimacy, consumer scepticism, and customer loyalty. Data from a cross-sectional survey of South African retail consumers were analysed using structural equation modelling. The results show that sustainability practices enhance both retailer legitimacy and customer loyalty, with legitimacy significantly mediating the effects of sustainability and corporate reputation on loyalty. Corporate reputation also strongly predicts retailer legitimacy. The study’s novelty lies in being the first to empirically test retailer legitimacy as a mediator in the sustainability–loyalty relationship within retailing, and to reveal the moderating influence of consumer scepticism. From a managerial perspective, the findings underscore the importance of transparent and credible communication of sustainability initiatives in strengthening legitimacy and fostering enduring customer loyalty, particularly in emerging markets where scepticism may be heightened.