Thriving at work is a positive psychological state that captures employees' joint experience of learning and vitality. Building on the socially embedded model of thriving, we first propose the positive relationship between leader-member exchange (LMX) and retail employees' thriving at work. We then explore store spatial crowding as a contextual constraint on this relationship. To better reveal this contextual impact, we further contend that team negative affective tone mediates the cross-level moderating effect of store spatial crowding on the LMX–thriving linkage. Using two-wave survey data collected from retail employees and their store managers across 89 stores of a grocery retail chain, we found empirical evidence on our multilevel-mediated moderation model. This study highlights the importance of considering wider contextual features as boundary conditions to thriving. Our results suggest theoretical modifications to the existing thriving model and offer implications on the practical interventions that retailing organizations can take to develop a thriving workforce.