The decline of model shops has nothing (or very little) to do with the rise of the internet. To dispel one myth from an earlier post, there are also very few internet businesses in the model trade that have the luxury of a warehouse. Most of them are one-man bands working from home, or at best out of a small workshop.
The model trade in 2008 in the UK is currently only 20% of the size that it was at the end of the 2nd world war. Firstly, the advent of television saw square-eyed youngsters, glued to the TV instead of model aeroplanes and boats. Much later came Atari computers, Nintendo, and ultimately the personal computer. The truth is that the majority of kids these days couldn't be bothered to build models, even if they had the basic skills to do so.
How many granddad's on this Forum have tried to get the little darlings interested and failed?
The end result? Just take a look at the age profile of the people involved in the hobby these days. Most are retired. We never get youngsters turning up at our stand at the shows saying "I'm new to the hobby."
Carol and I attend model boat shows all over the place, and frankly, we're terrified to go to most of them because normally we learn that one or other of our customers has popped his clogs. It happens all to frequently.
There have been a combination of reasons for the decline of the model shops: 1) a shrinking market (see above), 2) the high cost of stock, 3) cheap RTR's from China (why bother building?) 4) Exorbitant high street rentals.
I have to confess that I always wanted a model shop, I still look at empty high street shops sometimes, but I am also a realist, and to take one on these days would be financial suicide.
Malc