I agree -- I'm just finishing up helping design a retail store for a new brand here in Calgary. With the right product/market mix, a retail store can be very profitable.

(Which is why it's good that Blockbuster is trying to change their retail model to something else -- "We have a physical store network that nobody can match, now let's figure out how to make money off it." It's just a shame that they haven't been able to take their eyes off those stores, so they've missed other opportunities..)