The reason why is because the second and subsequent bikes, most people are spending more than they spent on the first one. Escalation, normalization, and all that. Very few shops are willing to invest too much effort in the initial '1', because most people will buy whatever is cheapest or they can justify is an appropriate amount to 'make them ride it', seldom or never ride it, and never buy another bike.

How to generate more people starts with supporting youth and recreational cycling, both in trying to make it seem safer and possibly youth / rec competitive - BMX racing, BMX competitions, etc. Even if BMX isn't a mainline of a given shop, I see on here and IRL plenty of people switching from flatland/park BMX to road cycling in their 20s or early 30s.