This article gives a simple and brief scope of structure and usage of location-allocation models in territory planning of retail network, trying to show the main shortage of some given models and the primary direction of their future improving. We give an inspection of theirs main usage and give an explanation of basic factors that models take in consideration during the process of demand allocation. Location-allocation models are an important segment of development of spatial retail network optimization process. Their future improvement is going towards their approximation and integration with spatial-interaction models. In this way, much better methodology of planning and directing spatial development of trade general. Methodology which we have used in this research paper is based on the literature and research projects in the area. Using this methodology in analyzing parts of Serbian territory through usage of location-allocation models, showed the need for creating special software for calculating matrix with recursions. Considering the fact that the integration of location-allocation models with GIS still didn't occur, all the results acquired during the calculation of methaformula has been brought into ArcGIS 9.2 software and presented as maps.