This report examines structural changes in Korea’s retail markets and their economic impacts, focusing on the interactions among market structure, regulatory policy, and demand-side transformation. Rapid growth in online retail channels, adjustments to offline retail regulations, and long-term demographic shifts have jointly reshaped retail market outcomes in ways that differ across regions and retail formats. The study aims to provide an integrated empirical assessment of these changes and to clarify the mechanisms through which they affect retail performance.

The analysis draws on large-scale administrative and transaction-level data, including nationwide credit card transaction panels at the sub-district level, online platform payment information, detailed records on local regulatory changes, and official population statistics. A combination of panel regression models and quasi-experimental designs is employed to identify the effects of online retail expansion, regulatory adjustment, and demographic change on offline retail sales, store counts, and market structure, while accounting for regional and format-specific heterogeneity.

The first set of results shows that increases in online retail spending are, on average, associated with declines in offline retail sales. The magnitude and direction of the effects, however, vary considerably across retail formats. Large discount stores exhibit the strongest substitution effects; meanwhile, super supermarkets (SSMs) and other mid-sized offline retailers also experience adjustment pressures in the form of declining sales and store counts. In contrast, convenience stores and certain proximity-based specialty retailers display weaker substitution effects, with some evidence of complementary outcomes at the local level. The expansion of rapid delivery services, such as same-day or next-day shipping, exerts an additional negative effect on offline sales, particularly in food and daily necessities segments, indicating that logistics innovation constitutes an independent channel of competitive pressure.

The second set of results evaluates the economic effects of policy changes that allowed large retail stores and SSMs to shift mandatory closure days from weekends to weekdays. Exploiting variation in policy timing across local governments, the analysis finds that weekday conversion is associated with a statistically significant increase in sales for large discount stores―a pattern that is robust across alternative specifications and that persists after controlling for COVID-19-related disruptions. The effects on SSMs and convenience stores are more heterogeneous and appear to depend on local market structure and consumption patterns. Notably, no systematic decline in traditional market sales is detected on average, suggesting that the regulatory adjustment does not uniformly disadvantage such formats.

The final set of results highlights the role of demographic structure in shaping long-term retail market outcomes. While population decline generally leads to market contraction, the adjustment mechanisms differ significantly across retail formats. While small-scale, proximity-based retailers (e.g., convenience stores) have shown consistent growth, they primarily respond to demand shocks through store exits, suggesting structural fragility often associated with excess entry. In contrast, corporate-type retailers, such as SSMs and supermarkets, tend to buffer the shock through adjustments in sales per store, potentially benefiting from product differentiation capabilities. Furthermore, population aging―specifically the rising share of the elderly and the shrinking baby boomer generation―is found to structurally dampen overall retail vitality. These findings suggest that policy frameworks need to move beyond uniform protection to support fundamental competitiveness, accounting for format-specific adjustment paths and the qualitative shift in demand.

Overall, these findings indicate that structural changes in Korea’s retail markets arise from the combined influence of market-driven forces, regulatory design, and demographic trends, generating heterogeneous adjustment paths across regions and retail formats. The results imply that uniform, format-based retail regulation may be increasingly misaligned with evolving market conditions, and that policy frameworks incorporating regional characteristics, retail heterogeneity, and long-term demand shifts are more likely to prove effective.

Abstract
Preface
Summary (Korean)

CHAPTER 1. The Impact of Online Retail Channels on the Offline Retail Market
　Section 1. Introduction
　Section 2. Literature Review
　Section 3. Domestic Online Retail Market
　Section 4. Data and Descriptive Statistics
　Section 5. Empirical Analysis
　Section 6. Conclusion and Policy Implications
　REFERENCES
　APPENDIX

CHAPTER 2. Analysis of the Effect of Converting Mandatory Closures of Large Marts to Weekdays
　Section 1. Introduction
　Section 2. Literature Review and Differentiation of the Study
　Section 3. Analysis of Trends in the Domestic Retail Market
　Section 4. Policy Transition and Regional Expansion of Mandatory Closing Days for Large Marts
　Section 5. Data Construction
　Section 6. Methodology for Empirical Analysis
　Section 7. Regional Analysis of the Effect of Weekday Conversion for Mandatory Closures
　Section 8. Nationwide Analysis of the Effect of Weekday Conversion for Mandatory Closures
　Section 9. Conclusion and Policy Suggestions
　REFERENCES
　APPENDIX

CHAPTER 3. The Impact of Demographic Structure Changes on Retailer Market Performance
　Section 1. Introduction
　Section 2. Literature Review
　Section 3. The Impact of Demographic Structure on Retail Performance
　Section 4. Conclusion and Policy Suggestions
　REFERENCES
　APPENDIX