Publishers Weekly took a longer look at the market for picture books. “Just what is going on with children's picture books? The true story is more complicated, involving the cyclical nature of the economy, the strong interest in picture books in public libraries, and the changing retail market. ... Still, ABC executive director Kristen McLean acknowledged challenges for bookstores and libraries. For example, picture books "require a tremendous amount of shelf space" and are difficult to display because they're large-sized and have thin spines.”
Read the full PW article here.
I will say that judging from what I hear firsthand from writers and agents, picture books are a very hard sell these days to publishers.