Well, guitar shops paid my mortgage for a number of years.
From my perspective a few things.
Yes, the internet is the big issue.
1. A warehouse with boxes guitars/amps etc is vastly cheaper to run from a website than a chain or even singular shop.
2. Big chain guitar shops need to shift units so the service suffers hugely (the chain I worked for now no longer offer a repair/restring service) which means people aren’t interested in going.
3. The big brands need to shift units...so go with the big chains with ridiculous dealership demands. I think the last buy in for a Gibson dealership was £35k. Small chains cannot do this.
4. The markup/margin/breadwinner is accessories - see point 1. A website for accessories once set up will run itself. 40-50% margin on branded strings and accessories, own brand/Chinese import accessories 60-75% - again, smaller stores haven’t got that buying power. You don’t need to ‘try out’ regular slinkies, so you don’t need the experience - you just buy them 15% cheaper online...
5. Second hand...a shop will buy a £200 retail bass for £100 as a part ex. Why would you part ex for £100 when you can sell it yourself for £180/£200 on eBay/Shpock/Gumtree/Facebook/Basschat. So the shops used to be more varied, and interesting - now they’re not.
6. Trend. It’s actually not that cool to be a muso at the minute. In the 80’s/90’s music was a bigger deal. Kids now don’t want it like we did.
7. Money. I haven’t bought a new (from a shop) bass in the 5 years I’ve not worked in a music shop. See point 5 - why buy new when there’s a glut of cheap second hand gear online...see point six...less buyers, more gear...
I could go on...think that covers most of it.