My local one in Peterborough (Second Front) is pretty good, with decent grading, the slightly musty smell, friendly owners and reasonable prices (full 58 pattern webbing for £10!). I wish they would get on the web, and take payment other than cash, though! It would mean I would spend more, but its pretty much the only way to go. The other store in the city closed about 10 months ago. He was in a dodgy area, with poor parking, a frankly dingy shop and took only cash and cheques (he once told me that he didn't want people spending money they didn't have). He got an average of 5 customers a week in the last year he was open - and those 5 might be all in one day (he was open five days a week). He's now on Ebay - has few overheads, and can shift more stuff.
The big problem with surplus is that the price of a surplus shirt/trousers is pretty much what you'd expect to pay in Primark for the same thing, and if you want a 'cool' camo look, then its seldom much more. Why buy surplus (and look a bit strange in DPM) when you can buy just as cheap elsewhere? When I started buying surplus as a student (the slightly expensive surplus place near Euston), most of it was green, cheap, hardwearing (dutch army trousers were fantastic). Now its seldom the first two. I can see exactly why surplus shops have started stocking Rambo knives and the like - its one way to move trade and improve margins.
A lot of surplus is tatty. 'Used' often means hammered, and a heavily worn jumper for a fiver isn't much of a bargain when you can pick up a fleece in Tescos for less. Since a lot of military kit is relatively heavy and old fashioned, and hardly cheap, its often no longer worth buying it to go hiking with, like the 1953 mess tins I bought 30 years ago. Who wants a scatchy, cotten Norgie?
The net has been both a killer and a lifeline for surplus stores. The killer is because you can find more than just the usual local stuff by Google, and you can spot out of line prices very quickly. The good bit has been for shops who know what they are doing, have a great reputation and make their kit/shop/site attractive (Endicotts). By using ebay, etc, they can flog the specialised items which might sit around for years all over the globe.
If you have a store that knows its market, offers interesting kit with good grading, makes its shop attractive and easy to look round (most surplus shops do seem to be one step away from Steptoe - someone needs to do a Mary Portas on them), and makes it simple for us to shop 'multichannel', then they will do OK. If they have a small back street shop, stuffed to the rafters so you can't find anything, offering poor condition C95 jackets in odd sizes at prices that are just stupid, refusing to do anything more than sit there and expect people to turn up and buy stuff (no cheques, no cards and closed much of the time) then they are going to close.
A good example of a shop that has survived is Frontline near the Lansdowne in Bouremouth. I first bought stuff from them 20 years ago, and popped in when I was visiting my parents. Good kit (OK, they stock Webtex as well...), interesting stuff (68 Pattern jacket for a tenner) and well displayed. I could even pay by card. If they had a website, they'd do even better. Glad to see that they have survived, and hope that others like it do too.
I love surplus stores. Like second hand book shops you never know what might turn up. But they have think like any other retailer. I work in retail part time, for a company which is regularly voted the best, and when I see a bad surplus shop, I see a wasted chance. Vulpes could describing any number of surplus shops I've come across - I want my classic shop back. I just want one thats as good as the best on the High Street.