What factors could explain the increased popularity of specialty stores in many sectors of retailing?
Oddly enough, competition. If you are a specialty store, you can work in your own niche and not have to fight WalMart. The local hardware store cannot compete but a small store that specializes in high end, low volume bathroom fixtures can become the only place in town to get certain items. It means the footprint of their customer base has to cover more area to get the same number of people and the prices have to be pretty exclusive.
