Patrick,
We used to have three LHS in town but now all but the RC flyer shop are closed. The USA chain called Hobby Lobby moved into town. They are an overall craft / hobby store. Much of thier inventory includes stuff like cross stitch, candles, interior accents, pictures and framing, holiday accents and decor, fake floral, pine wood craft, etc. Only about two isles are dedicated to plastic modeling. They stock Testors MM and Vallejo paints. The inventory is a good split between auto and military armor and aircraft with about 30-50 kits of each. There is also a small area for very basic die-cast kits (good for young beginners). They have a couple isles dedicated to painting (oils, acrylics, watercolor, pastels, etc.) as well. They also carry Iwata products in a small glass case, to include spare or replacement parts for Iwata brushes.
I guess , when looking back over the last 20 years in the hobby, I should consider myself lucky to have the stores I have locally. It is so easy and tempting to go straight to the web and order it cheaper then have it delivered to your door. But, I really like going local where you can see in person they kit before buying, check out the paint before purchase, etc.
What I do miss is the comradrie; sitting around and asking questions together or viewing friends builds in person, discussing future builds, etc.. Connecting locally is another dimension all in itself. My local IPMS club is an hour away and are 99% armor and aircraft (no figures, cars, sci-fi, etc.)
So to answer the question, "where is the hobby going?", only time will tell. But I do believe we have a say in it as long as we still participate and foster it along.
Ben