My LBS caters for the Box Hill sporty crowd. I use them if I just need a brake block or inner tube, and to order Brompton spare parts because they are a dealer, but nowt else. I discovered recently that they do not have any panniers whatsoever in stock, which confirms my impression of them.
My second-L BS is Dave at Pilgrim Cycles. The world is a better place for his existence. I get to talk endlessly with him about trends in touring bike designs and I get to drool over his stock of classic touring machinery. I therefore make a point of patronising him where possible. In the above example, I willingly paid full retail price for new panniers from him rather than £20 cheaper online.
If we all chase cheaper prices online, we are making a conscious decision about the future of retailing.