Only slightly related, but...
When I made my first batch of beer, I went to a homebrew shop two states away in my parents' town because the local pickens were pretty sparse. I've been back a couple of times, but their prices are close to double what any major catalog/internet retailer charges. Clean store, helpful people, but golly I can't afford that!
So for the past year I've been mail-ordering almost everything.
Now imagine my surprise when I find a LHBS that's only 30-40 minutes away (Annapolis Homebrew, BTW). By "find," I mean off the highway, behind not one but two shopping centers and darn near in the woods. "Parking lot" is all cracked and broken, the place looks pretty shabby from the outside. Inside is one dude and racks of equipment. Dimly lit, but holy sh*t, what a homebrew shop!
Owner greets you at the door, "Hi, welcome to... we have XXX and XXX on tap, would you like one?" I'm like, "Well, hell yeah!"
Prices are reasonable (5-10% over catalog prices, but since I don't have to pay shipping...), staff is friendly and knowledgable and yeah it's a little off the beaten path, but who really cares? This place rocks. Yeah, it's a little shabby-looking, but a good attitude, great service and very reasonable prices more than make up for it.
So I guess what I'm saying is that you're certainly right about making the place look pretty good, but just that you can overcome a low-rent storefront if you have a solid business.