Wendell,
an example of the difficulty in expanding the market is my city. Sydney, Australia is a city of nearly four million people. In this vast city which is considered by many to be one of the largest cities in the world, in so far as the area that the city occupies, there is one largescale dealer retailing new product (Bachmann, Aristo-Craft, USA Trains) and this business happens to be the distributor for Australia. If one wished to purchase new Marklin/LGB items, then the nearest retailer is also the Australian brandname distributor, located about two hours drive south of Sydney.
How is the hobby to survive when the only relatively convenient outlet is the internet? In fairness, 'O' scale is also similarly disadvantaged and considered to be a 'specialist' scale. Other popular scales, such as 'N' and 'h.o.' are relatively well supported and thrive. The only railroad hobby exhibition in Sydney happens once a year only and largescale exhibits are generally only one or two layouts per exhibition and they are fairly simple layouts designed to impress children. The scale is indeed very poorly supported, both by the public and by the retail sector. Other east-coast capital cities, Melbourne and Brisbane are perhaps a little better consumer/retailer supported than my city. I sell 'used' LGB largescale items every now and then on eBay and the bulk of the sales are to either Melbourne or Brisbane. Very few sales (basically none) occur within my geographic region. My state is the most densely populated in Australia and yet a retailer of largescale products would have a hard task making a living from retail sales. I doubt that there would be more than 1000 people in Australia 'involved' in the hobby (population around 30 million) and perhaps only about two hundred in total who 'regularly' purchase items (say several pieces per year).
The Christmas train idea has never been locally supported, but who knows, with the increase in popularity of Halloween, trains around the tree may become a reality, but I will not be holding my breath waiting. A local very large 'hypermarket' shopping centre, many years ago (back in the 1990's) put in an overhead Christmas railroad (non-LGB) through part of the store, maintained by a local hobby shop. Apparently, the required upkeep was immense and the overhead rail (raised about four to five metres) was cleaned everyday, as the trains kept stalling due dirty railhead. The display occurred one year only and was most likely considered a disaster by many.