LFS vs Online. Well, where do you think both get their fish from? Wholesalers. Which get multiple shipments from the various reefs throughout the week, but generally Sun-Wed most flights come in. From there they are unpacked by workers (low paid and sometime undocumented workers - nothing short of how produce gets to your table).
Some species are put in 20-30 gl holding tanks in multiples; others are put in individual 4"x4" cubicles. Corals are usually put in runways by species. They are fed mysis/brine...tangs usually have stalks of lettuce in their tanks. The dead are eventually removed throughout the day; the dying left to do just that.
So, if your LFS is close to a wholesaler portal then they most likely pick their own fish because the alternative is for the workers to fill (pick) the online retailers order via their own wholesaler online order...duh! They don't see the fish they are buying at wholesale to sell to you at retail...and thus I suspect they have a much higher mortality rate.
There are so many fish and corals at the wholesalers that are in a state of illness. No LFS that is hand-picking their fish are going to take a chance on a fish that is showing signs of stress...not in this economy. So think about it...where do they go? Do you think the wholesaler is going to take the whole hit and send only the best of their stock to the online retailers? And that's assuming that you believe "management" is quality checking those outbound orders. No, they hand a worker a pick sheet and he nets, bags and packs.
I think if more hobbyists were to have a chance to tour the wholesaler facilities and see first hand how many unhealthy specimens are housed after the flight from the reef, then they might start thinking about their ethical responsibility in this industry/hobby. To keep a reef you should understand that for every one healthy fish or coral you have that dozens if not hundreds died due to poor catch procedures or shipment stress. IMHO, you have a responsibility to educate yourself so your one fish or coral not only survives, but thrives in your tank...and to aquaculture or support those efforts where they exist.
When I go with my LFS owner to the wholesaler to pick her inventory I see all the local LFS competition, plus a few local based "online retailers" picking their own stock. Then I see the pickers packing shipments for some of those bigger name online retailers...is that worker concerned about the crap on a fin or the cloudy eye before he bags? - I doubt it.
Bottom line...the fish all come from the same local wholesalers...there is no magical place with perfect conditions...most of these places are hot, stinky and have terrible lighting. But at least I know the owner of my LFS goes to great lengths to care for her inventory once they hit the shop and to inform her clients of how long they've been in stock. And yes, sometimes the fish look good, but within the week the whole lot may die off with that particular species. Is it the LFS's water or acclimation process since everything else is fine? Or is it collection or shipment stress/procedures at the wholesalers?
Before you buy livestock you should not only test your water, but ask the LFS what salinity, Ph and temp. their stock is housed in. I see it countless times...people coming in for that pretty purple fish and talking about how all their other fish have been fine for years and their water is "where it should be." But test their water and the salinity is at 1.028, Ph at 7.8 and I dare say their temp is probably different (so how do they acclimate). The LFS on the other hand is housing at 1.021, Ph 8.3, temp at 77...they work to keep their tanks stable by testing weekly...because they have thousands of dollars of inventory at any given time...losing that at any rate could wipe them out of business.
Lastly, when your pump breaks at 6pm on any given day I seriously doubt you are trying to get a hold of Marine Depot or Drs Foster & Smith for immediate help. If LFS stores continue to disappear, then this hobby will begin to change for the worse in my opinion.