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@roadwarrior
I think some LBS's need to man up and open earlier and close later - as much as i hate evans and cyclesurgery they are quite good at this. People are busy, need to drop a bike off for repair before work, collect it after, or pick up some emergency supplies on the way home so 9-5/6 opening hours don't cut it.
As much as most bike shop staff would love to have Sunday's off, it's pretty ridiculous to close then - you would be losing a lot of money.
Stock's a difficult one - with the space available to most LBS you physically cannot compete with giant warehouses. There will always be customers who want some specific bar/stem whatever, and most of the time they know exactly where to get it from. With and LBS I think it should be more about 'smart stock' Have a range of items that cover the bases and pricepoints, but do not overwhelm customers with too much choice. If they ask why you don't stock a particular brand, have the reason at the ready, and explain alternatives.
Price is the final hurdle - Alot of manufacturers/distributors are now promising to reign in who they sell too to stop there products being agressively discounted by online sellers, not only does it damage local business it also damages the perception of there brand if it's permenantly on 40% off online.