The locational decision of the newly emerging, large discount stores deserves much attention. For the sales firm, the location of a new store is perhaps the single most important decision for its long-lasting profitable operation. For the local governments, the locational decision of new large discount stores has important impact on the spatial structure of economic activities and the development of local economies. Nevertheless there are relatively few literatures on the locational decision of large discount stores. Furthermore, most of the literatures are either theoretical or purely descriptive. In particular, as far as I can confirm, there seems to be no empirical study which examines the relationship between the sales volumes and locational factors of large discount stores. This paper examines the effects of locational factors in the determination of sales volumes of large discount stores, by analyzing the cross-section sales data of 145 large discount stores operating in 2001. The criteria of largeness is the sales floor area, which should be not less than 3,000㎡. As for the locational factors, we considered (ⅰ) the demographic factors such as population density, number of households, (ⅱ) the income factors, mainly proxied by municipal taxes and number of automobiles per households, (ⅲ) the transportational factors such as public trans-portation(buses and subways), the number of access roads, general environment(residential, commercial, or suburban), and urban planning, and (ⅳ) the competition factors such as coexistence of discount stores, traditional markets or department stores in the same trading area. It should be recognized that all the locational factors should be measured within a certain region, which is frequently referred as "the trading area." We tried and adopted three operational definitions of the trading area: (a) the municipal region, called "Ku," where the store is located, (b) the circular area within 2㎞ from the store, and finally (c) the circular area within 5㎞ from the store. Though the locational factors are our main concern, we also need to control other storespecific factors to acquire meaningful empirical results. As for the store-specific factors, we considered business hours(duration), floor area, the number of parking lots, the number of months since opening(since most discount stores have been built in recent years in Korea), and finally the brand name to control image and credibility effects. The main findings of this paper are as follows. Firstly, the population density has a positive effect stably on sales volumes of large discount stores. Secondly, while the proxy of income level has a positive relationship to a certain extent, the relationship is reversed to be negative in those regions with the highest income level. It suggests that the competitive power of large discount stores lies between general markets in the lower side and department stores and other high-class stores on the higher side. Thirdly and finally, the competitive relation with the same kind of stores affects sales volumes negatively in the 2㎞ trading area, but it has statistically insignificant relationship in the 5㎞ trading area. It suggests that locational competition among large discount stores takes place in relatively small range, and the appropriate definition of the trading area lies between 2㎞ and 5km in radius.