More than 1 million shop owners in South Korea have closed their businesses in 2024, marking the first time in the country's history, Seoul-based Yonhap News reported on Sunday, citing official data.

The retail and restaurant industries made up nearly half of all businesses that shut down last year, according to data from the National Tax Service.

In 2024, 1,008,282 individual and corporate businesses filed for closure, an increase of 21,795 from the previous year.

It is the first time that business closures have surpassed 1 million since record-keeping began in 1995.

Business closures have been on the rise since 2023, with data indicating that the increase was caused in part by an "accumulated slump" during the COVID-19 pandemic and rising delinquency rates due to high interest rates.

The business closure rate has also risen since 2023, reaching 9.04% last year, up from 9.02% the year before.

Slumping sales were the most commonly cited reason for business closures, accounting for roughly half of the total.

According to Kim Kwang-seok, head of economic research at the Institute for Korean Economy, continued high interest rates and inflation have reduced real income, resulting in lower retail sales and restaurant spending.

Due to worsening profitability, nearly 1,000 gas stations also closed across the country during the last six years.

The number of gas stations fell from 11,499 in 2019 to 10,528 by the end of June 2025, showing a decline of 971 stations, KBS World reported.

The closures are primarily due to declining profitability, with operating profit margins dropping sharply from 17.8% in 1991 and 11.5% in 2001 to just 1.7% in 2023. (Anadolu Agency)