Seoul’s retail sector is entering a slowdown phase. (Image courtesy of Yonhap)
SEOUL, Feb. 18 (Korea Bizwire) — Seoul’s retail sector is entering a slowdown phase as economic stagnation and reduced consumer spending take hold, according to a recent market analysis.
Cushman & Wakefield Korea released its Q4 2024 Retail Market Report on Monday, forecasting that persistent inflation, a strong U.S. dollar, and rising household debt burdens will lead to a further contraction in consumer expenditure throughout 2025.
“Discretionary spending, particularly in leisure and shopping, is expected to take the biggest hit,” the report noted.
The slowdown was already evident in the fourth quarter of 2024, as indicated by vacancy rates across Seoul’s major retail districts. The average vacancy rate for prime shopping areas such as Myeongdong, Itaewon, and Gangnam stood at 16.6%, marking only a modest 0.5 percentage point decrease from the previous quarter and a 2.0 percentage point decline year-over-year.
Garosu-gil recorded the highest vacancy rate at 41.2%, increasing by 5.2 percentage points from the prior quarter and 4.9 percentage points year-over-year. The report attributed this prolonged downturn to the loss of foot traffic to neighboring areas like Hannam and Dosan.
Other high-vacancy districts included Cheongdam (18.0%), Gangnam (15.4%), Hannam-Itaewon (10.5%), and Hongdae (10.0%). Among Seoul’s six key retail zones analyzed, five maintained vacancy rates exceeding 10%, highlighting the sector’s ongoing struggles. Myeongdong was the sole exception, with a comparatively low vacancy rate of 4.4%.
A representative from Cushman & Wakefield commented, “Korea’s retail market has moved beyond the post-pandemic recovery momentum and is now facing a period of slowdown. A meaningful rebound in consumer spending is unlikely in the near term.”
With headwinds persisting, the outlook for Seoul’s retail market remains uncertain, raising concerns for businesses dependent on foot traffic and discretionary purchases.
Lina Jang (linajang@koreabizwire.com)
