It's pretty much a given that the CD format has lost its relevancy as the primary format for distributing music.
But for many, it's still the easiest or only way to consume music and retailers still like having physical formats to sell despite the associated waste involved with shipping inventory, unsold stock, etc.
Personally, if I want an entire album of an act that I enjoy, I'll still buy the CD more ofthen than not, which is immediately ripped and added to my iTunes play list and the CD is never again to be played unless it needs to be re-ripped for whatever reason.
If I see a band play locally that I want to support and they're selling CDs at their booth, I'll buy, but again, it gets ripped to iTunes and then shelved.
It's kind of wasteful, but as it's been mentioned, CD still has more data than any format with a lower bit rate (MP3, etc) and has the best sound as a result. Of course the difference is often only noticeable through high quality studio monitors or sound systems, which doesn't apply to the way most listen to music anyway (on sub $100 headphones or computer speakers or the typical car stereo).
