Recently, retail businesses in Seoul have experienced unprecedented business crises. A combination of factors, including increased share of online market and the advent of new commercial places are threatening the mom-and-pop stores, causing vacancy rates to rise. Therefore, it is important to understand whether the supply and demand of commercial spaces in Seoul is either balanced or oversupplied based on the demand. 
This study analyzes the adequacy of existing commercial building stock and forecasts demand of commercial facilities in Seoul to determine the need of management in urban planning. It also reviews whether the changes of market conditions and commercial areas supplied are due to inconsistencies with urban planning laws and policies.
The area of commercial facility stocks has continuously increased and is expected to reach 30 million square meters for 20 years since 2000. Even now, it is still growing, although dramatic increase in commercial floor area has eased since around 2010. Nonetheless, retail stores, which are expected to be significantly impacted by the online market, are still increasing. However, demand for commercial facilities is rapidly decreasing. In 2014, 2015, and 2016, the commercial floor area has decreased by about 8.8%, 15.1%, and 14.8% annually, respectively and this trend is estimated to continue until 2045 due to changes in the population, economy and market.
Choice of location of new retail stores varies according to land use. Except for supermarket and department stores, most stores are located in type 2 residential zone rather than commercial zone, and the ratio of commercial floor area to the total floor area in non-commercial zones is higher than in commercial zones. This implies that the changes in residential areas, which include the opening of considerable number of new retail stores,  results to drastic changes compared to the size of parcels developed in commercial areas.
The analysis of Concentration Index (CI) shows that the commercial district in the residential area expanded to the periphery, even though inner areas in the commercial district remained unchanged. It seems that horizontal expansion of stores is easier than vertical development because of the stores’ tendency to be located on the lower floors and high premium on developed commercial districts. 
Commercial building floor spaces are developed by not only new building construction, but also change the use of existing buildings. For example, from 2015 to 2019, 42.9% of commercial floor area was supplied as a result of change of use of buildings. These changes of building use reveal a crucial finding that volume of commercial floor area converted from residential floor area and offices is larger than the opposite case – the changes occur in one direction. It is difficult to respond to changes in demand by changing the use of building due to several factors, including the number of parking lots legally required, taxes, and location choice of stores. 
The demand for commercial space is expected to continue to decline. Furthermore, a consensus that shrinking demand for commercial space has already formed among central and local governments of Seoul. Based on this study, commercial area management policy alternatives should be considered and research about types and characteristics of commercial district for preparation of the demand changes of commercial areas should also be performed.