If you check most LHS's you will see that they did NOT grow in 2007 as much as anticipated, also it is expected that 2008 will also be 'flat' in growth, hopefully what increases in business in the past yrs will hold them [LHS] over till a growth year comes around,
Gas prices, & vehicle costs, have scared many away. Smaller less costly RC cars have been somewhat of a 'boom' to many LHS's as consumers have less 'free' $$ available to spend on hobbies.
Those LHS's with cash to spend on 'diversifying' into plane/train/plastics areas will try to attract consumers willing to spend what little cash they have left over after filling Mom's Caravan up with 87 octane!
Those 'die hard' [read touring car] racers will back off the larger purchases and try to get an extra yr or so out of their 'PHI', as will the more expensive off road car owners. As the extra cash is going in the gas tanks of their work cars.
With oil at or near $100 barrel costs of consumables [fuel, paint, etc] also will rise, thus less racing time per buck = less 'pleasure' per buck.
Long post I know, but a lot more will be said, only the future will tell if any of us were even close.
Thankx, Bill