1 in 5 Fails in Seoul... Gangnam-gu Has the Most Closed Stores [Self-Employed in Crisis]①

Last Year Seoul City Restaurant Closure Rate 18.99%
Gangnam-gu Closure Stores 2,798
Closure Rate by District, Gangseo-gu Ranks 1st

Last year, one out of five self-employed restaurant operators in Seoul closed their businesses. The number of closed stores also increased compared to 2020, when the COVID-19 pandemic was at its peak. The outstanding loan balances and delinquency rates of personal business loans at major commercial banks are also on the rise, making life increasingly difficult for self-employed individuals.

According to data obtained by Asia Economy on the 5th through the big data commercial district analysis platform OpenUp by the fintech (finance + technology) company 'Finda,' the restaurant business closure rate in Seoul last year was 18.99%. This represents a 3 percentage point increase compared to the previous year (15.99%). The closure rate last year was even higher than the 2020 rate of 18.89%, when the COVID-19 pandemic began.

Gangnam-gu Tops in Number of Closed Stores... 20% Surge Compared to Previous Year

The number of closed restaurant stores last year was 29,072, a sharp increase of about 17.44% compared to the previous year (24,755), and 149 more than in 2020 (28,923). Looking at the 25 autonomous districts of Seoul, Gangnam-gu had the highest number of closed stores last year with 2,798. Although the number of closed stores in Gangnam-gu slightly decreased compared to 2020 (2,948), it increased by 20.4% compared to the previous year (2,324).

Following Gangnam-gu were Mapo-gu (2,060), Songpa-gu (1,916), Gangseo-gu (1,678), and Yeongdeungpo-gu (1,479) in terms of the number of closed stores. Notably, the number of closed stores in Songpa-gu and Gangseo-gu last year increased compared to 2020, when COVID-19 was at its peak.

The district with the largest increase in the number of closed stores compared to the previous year was Geumcheon-gu (26.11%). It was followed by Jungnang-gu (23.67%), Jongno-gu (22.37%), Seongdong-gu (21.67%), and Dongdaemun-gu (21.23%).

Gangseo-gu Has the Highest Closure Rate... Regional 'Disparities'

As of last year, the district with the highest closure rate was Gangseo-gu (20.78%). Gangseo-gu's closure rate rose by 2.08 percentage points compared to the previous year. Next was Gwanak-gu with a closure rate of 20.58%, followed by Songpa-gu at 20.47%. Gangnam-gu, which had the highest number of closed stores in Seoul, also recorded a closure rate of 20.41%, ranking fourth.

However, there were significant disparities among districts within Seoul. Jung-gu had the lowest closure rate at 14.66%, which was 6.12 percentage points lower than Gangseo-gu, the district with the highest rate. Although Jung-gu's closure rate increased by 1.22 percentage points compared to the previous year, it decreased by 4.21 percentage points compared to 2020, when COVID-19 was prevalent. Jongno-gu recorded a closure rate of 15.32% last year, making it the second-lowest district after Jung-gu. Jongno-gu also saw a 3.19 percentage point decrease in closure rate compared to 2020.

A Finda representative said, "Although Seoul's restaurant commercial districts seemed to be improving after COVID-19, last year saw a sharp increase in closure rates, indicating ongoing difficulties. Given the significant disparities among districts, prospective restaurant owners considering starting a business in Seoul should carefully analyze the detailed commercial districts of their desired areas above all else."