I think you'll find that most people buy their initial gear at the LDS that they originally trained with. I did, and the 4 or 5 people that I dive reguarly did as well. Second and beyond generally are bought from the dive shop that you either feel most comfortable with, or has the brand you want at the best price. Regs are tricky, people (or want) a certain one (unlike BCD's where any of 3 or 4 brands are almost identical).
I am in the process of helping a friend open a dive shop, and know someone who had one way back before he was in the Navy. 2 similarities between them...they know that they need a strong instruction program, and they know that they'll never make money off of instruction. You need the program to get people into your store, and once that happens, the rest is all about what you have, what you charge, and how your staff is.