Pet-Smart-CO didn't kill the Mom & Pop LFS…..the "Wal-Mart shopper" metality of hobbyist did. Which is also the reason there aren't many Mom & Pop anything- brick & mortar store left.
Pet-Smart-COs live by Dog & Cat food sales, everything else is an add on sale and/or attention 'draw'. Both companies could dump aquatics/reptiles & small animals tomorrow and they would be fine and most likely be more profitable. With the internet presence in the hobby, most of you will live to see that happen. Even my generation, Baby Boomers, have embraced Online shopping.
Right now show of hands, who buys big ticket filters, pumps, lights online?
Online stores blow away Pet-Smart-COs on equipment the same way, Pet-Smart-COs blew away the Mom & Pop LFS. Retail shelf space is based on sales per sq. ft. of sales space. We see a fish tank as a home for fish, plants, inverts. To a retailer a fish tank is a shelf, that has to be profitable. Stop buying Aquatic supply, the more profitable segment of that department, eventually that space gets replaced with dog food bags. Fish sales alone will not justify an Aquatic dept. to a chain retailer any more than it did for Mom & Pop LFS operators.
Eventually, there will only be aquatics online. At first the pricing will be cheap as the online shops fight for market share. Most will fail, the survivors will become the only option. They will either price fix or continue to cut expenses and of course quality will suffer.
If there is a any hope for the hobby to live on it will be that Hobbyist will go full circle to our roots of breeding our own fish, growing our own plants and building our own tanks vs. shopping. So maybe it not a bad thing after all.
BTW - PetSmart Central System.
PetCo, Multi-Systems in 4' segments each with it's own sump. Typical layouts being single 4', double 4' and occasionally a triple 4' systems. PetCo runs chillers on their Goldfish systems.