I've been to two nearby and we had a brief market stall setup as one which closed after a year. While I loved a chat and would buy everything that made sense to buy that I needed (dry yeast, air lock, bungs) I always thought they failed to capture the people who want to spend serious money, they didn't have much I wanted anyway. Some dusty kits, pressure barrels, small amounts of aged grain and hops and the odd packet of nottingham and us05. Great for the odd small purchase, £5-15 here and there, maybe the brewer who wants to make a bit of home brew because it is cheaper than buying it in, but you need to sell to the enthusiasts dropping £200-300 on equipment and stuff every few months because they enjoy a silly hobby, buying whole bags of base malt, a couple of kegs, 500g of mosaic at a time, interesting looking wet yeasts, all that jazz. I guess that kind of stock relies on customers, turn over and having the money to tie up in said stock and I admit I was the kind of **** that if they've everything except the 316g of pale chocolate I need for a recipe in stock I'd get the lot online because I'd have to to get up to free postage.
I can imagine a physical retail presence working in this day and age if they had absolutely everything, knew absolutely everything, had a successful online shop as part of the physical shop, knew how to do events like brew days, tastings, meet the brewer, mini festivals and so on and was attached to a micro pub/coffee shop/play area. Sounds mad, but I think that is the nature of retail now. You've got to be a destination, a day out, an event, an experience otherwise people will just shop online from their sofa. If the idea of a home brew shop/business like that seems insane it is unless you have a thriving local scene or are prepared to be the person committed to building a scene. It does only take a few key individuals in the right place at the right time to make it happen.