Well certainly a shopper using a local shop to look at the product and try it on for size, then leaving and buying the product online is helping kill the local shop. The costs of running a local shop are just higher than an online shop. Retail space is more expensive than warehouse space. You can move more product per employee by moving your shipping staff to the phones when they get busy and phone staff to shipping when it's light. Online retailers have a larger customer base to offer product to, so can manage lower margins, plus they get discounts for buying more product.
My local "shop" solves these problems by being run out of his garage. He's retired from a "real" job so he doesn't need to make much money. I would guess he makes most of his money by teaching classes, but he has a pretty good stock of Zeagle, Atomic, and Bare that he sells (he'll typically match online prices, but he doesn't guilt me into anything if he can't) so I hope he is making enough money off of it to afford his thousands of dollars in inventory. His shop hours suck though, so sometimes it's a bit of a struggle to get stuff from him. The last local shop I worked with was in Carson City and the owner was rude, pompous, self-centered, etc. He definitely pushed me into online shopping, and I would drive an hour each way to get fills.