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There are some significant other contributing factors to the decline of traditional retail stores:

1) The internet has been taking market share from brick and mortar stores
2) Technology change has decimated stores selling or renting music and video such as Best Buy, Circuit City (gone), Blockbuster, and Hollywood Video.
3) Aging of the population. As the baby boomers reach retirement age they are downsizing homes and liquidating possessions. The home furnishings, tools, and clothing they are selling or giving away reduces demand for retail stores.
4) The proliferation of second hand retail stores (Goodwill, Salvation Army, consignment shops, and flea markets) is taking market share from traditional discount chains.
5) Craigs List and eBay have created new ways for consumer to find second hand merchandise as well as new goods and services, bypassing traditional brick & mortar retailers.
6) The rise of dollar stores servicing low income customers and taking market share from discount stores.
7) Casual dress in the workplace has shifted clothing buying patterns.
8) Shifts in the demand for consumer products due to demographics changes and technology result in reallocation of disposable income by consumers and therefore store selection. An example is demand for cell phones which is resulting in a proliferation of retail outlets marketing mobile phones and accessories. The billions being spent on cell phones and mobile services each year by consumers represents a shift in purchasing from other products and retail stores.

The retail landscape is constantly evolving in response to demographic shifts, technology, and changing consumer tastes. In my lifetime I’ve seen the demise of the 5 and dime store (Woolworth’s, TG&Y, Kresge) offset by the creation of the dollar store concept. The local mom & pop drug store has been replaced by big chain drug/convenience stores such as Walgreens and CVS. Gasoline station franchises of the big oil companies where the attendant pumped gas for you have been replaced by chain gasoline/convenience/fast food stores such as WaWa and Sheets. Specialty store chains, such as Victoria’s Secret, Ann Taylor, Talbots, Chico’s, and Jos A Banks have replaced mom & pop local clothing stores. Local bookstores have gone away, replaced by Barnes & Noble, Borders, and Amazon. Now electronic downloading of books to Kindles, iPads, and Nooks has killed Borders and threatens Barnes & Noble as well as the local public library. The Sears, Montgomery Wards, and JC Penny catalogs were discontinued two decades ago only to be replaced by Amazon and other internet retailers who adapted technology to make mail order shopping a growth industry.

Some formerly great retail chains such as Kmart and Sears are currently dying because the Wall Street investment wizards who purchased them are stripping them of assets by not investing in store upkeep, inventory, or associates on the floor. The management failure to provide good value and service to customers is causing them to fail, not the economy.

On the flip side we see other brick and mortar retailers thriving - H&M, Zara, Apple, Trader Joe’s. History shows retailers who understand the customer, adapt to the times, and continue to innovate will prosper even in hard times.

Good analysis. The rise of the Internet has devastated the market for traditional retail. Between higher prices, indifferent customer service, and the hassle (and expense) of driving around town to get to a store and back, the case for letting your "fingers to the walking" has never been greater. The only retail I frequent with any regularity is grocery stores and gas stations, and I expect that's increasingly the case for most shoppers. There are few other purchases that can't wait 48 hours for Amazon Prime delivery.

Case in point. My 14 year old microwave oven died last week. Did online research and went to several stores in the area. Selection was very limited, sales people were clueless as to the pros and cons of the various models they had on display, and a Best Buy that had the model I was interested in on display didn't have it in stock but assured me that they could get it in two weeks. Ordered it from Amazon and it showed up the next day even though I expected 2 day delivery.

I don't see how traditional retail competes with this. The only niche left is for high-end retail that excels in customer service and that's a small market, and the deep discount stores who cater to the cash-and-carry low-end segment. Clothing is the last remaining holdout since most people still want to try things on. Whether that will last depends on how quickly Amazon and others push for 3D body scans and custom-manufactured clothing that fits you exactly. That's one of the promises of robotic manufacturing and is feasible today but inertia has held this back for some time.