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I don't want to be too controversial here but if we live in a capitalist society then the market must take its course. If yor local shop has to close then that is a sad fact of life. The manufacturers cannot restrict and they should not be able to manipulate the market; I'm sure EC rules are the same as the rest of the world and won't allow this.
If you can afford to support the corner store great but many modellers have a limited budget and understandably want to stretch it as far as possible. Many large internet houses have good service anyway (it's not price dependent). I presume the derogatory term "box shifter" applies to them but they'll get the majority of my business. I cannot help but get the feeling that I am contributing to the small shop owners retirement fund as the ones I have dealt with wont budge one cent/penny in price. People like to have at least the perception they are getting a good deal.
Resourseful shops could form a purchasing alliance to compete with the big boys. Someone has already suggested diversification....there is one model shop on the Gold Coast and he doesn't cater for UK modelling but he has three "stings to his bow" as it were. ( Model trains; Christmas items; dolls house miniatures). Yet I am able to obtain all my requirements through the net and the same goes for advice.
So in summary if Joe Blogs wants to work out his garage he should be able to do so. A vacuum will always be filled but not necessarily in the way we expect!
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