We have way too many LQSs in our area (Twin Cities, MN) for the smaller shops to remain viable. Within a 20-25 minute drive from my house I can think of 8, and that doesn't include the 3 that have closed the last 12 months or so. After my favorite LQS closed (where I learned to quilt and still do the quilt retreats with the ladies) about 4 years ago, I still haven't found that place to call home. There is one shop that is really close to fulfilling that spot in my soul, but it hasn't happened yet!!
It is sad that the shops are closing. I am guilty of buying actual yardage from Joanns better fabrics and paying at 40% off rather than $9 a yard at my LQS. I do go to a few shops often to rummage through their clearance sections though!