The major death blow to the traditional record shop was the use of CD's by supermarkets as a 'loss leader' - selling them below retail price to entice customers into the stores.
Soon after that came the wide-ranging change in music provision and consumption caused by the twin arrivals of the i-Pod, and Internet file sharing.
Wheras years ago, music was a pleasure and a hobby, and you bought it in a specialist outlet staffed by people who knew what they sold, it has now become as much a supermarket product as baked beans or jam, and sold in a similar fashion.
The file-sharing has meant that people can track down and download individual songs, so music is absolutely everywhere these days, and almost always used as a 'background' to another activity, as opposed to setting time aside to listen to a new or favourite album.
There will always be room for specilaist outlets with knowledgeable staff, but the high street store has gone, and will probably never return.