Things started to go wrong when Sainsburys bought up half of London Road for their expansion, which took ages to actually happen. There was a general movement away from all small town centres and a general downturn in the retail sector (partly due to online shopping).
I am sure other people can identify other contributing factors (i.e. people replacing rather than repairing electrical goods would have had a particular affect on Mercury), but for me it was a longer term closure of a number of retail units that led to the specific problems in Forest Hill. We are still working towards full utilisation of the retail units in the town centre, although as Dave Whiting regularly reminds us, there may be more retail units than is sustainable. The real answer is to get the right range of shops back into Forest Hill and I think in general that it is sustainable, just like East Dulwich.
We do actually have a butchers in SE23 (Wood Vale), a bakers (in Perry Vale), four supermarkets (if you include the Tesco, Sainsburys Metro, and Coop, not including Bell Green), three petrol stations (this time including Bell Green), and I think we still have a couple of trendy nik-nik shops. Amazingly we still have MacKays who have stuck in Forest Hill for many years but nobody ever mentions on the forum.