If you are a prospective shop owner deciding where you want to locate your shop, LVT makes no difference at all. If you move to an agglomeration to make it bigger, you might raise other people's LVT slightly. 'Tragedy of the Commons' style.

Perhaps if all the shop owners got together as a cartel they would face the incentives you talk about. But not for individual owners.

Also, LVT does not change the total yearly cost of some land. It obviously doesn't change rents; and even for land owners it doesn't change the recurring costs: the sum of cost of capital for the value of the land plus all taxes is the same with LVT or without. (Basically, the market will prince the LVT burden into market prices of land. Imagine a city where some plots of land have to pay LVT and some don't: the total cost of ownership for comparable plots would be the same independent of whether they are LVT plots or not. Same for renting plots.)