You could bring in the bulk-buying angle that gives the big stores higher discounts enabling them to sell their products at relatively lower prices than a smaller store. But the customer service you'd get in a smaller store would be of a higher quality than what you'd get elsewhere. So where do you draw the line? Buy from a larger store that doesn't care much for their customers or the smaller store which sells their stuff at higher prices but have superb customer service? And oh, is the theory [large stores are cheaper] true?
Well that is exactly how our local stores are like in my country. My family choose to buy most of our needs for the whole month all at once so we prefer to go to a larger store but if we ever run out of few things in the middle of the month then there is a smaller store next to us with a higher prices on their products. I believe prices are more expensive in a smaller store because they don't have product choices as much as a larger store does so less people are likely to come and buy from them. But once someone comes and purchase from them they already earn a good money which is equal to a total of probably two or three customers in a larger store.
If I could, I'd pick the smaller store every time. Sadly, even down here in Southeastern Louisiana, there's absolutely no independent stores in the area, save maybe a gas station or convenience store. Not only that, but we're also experiencing a boom in stores in our town of ~10,000. In one five mile strip of highway there's four supermarkets, including both a Walmart Market and a Walmart Supercenter. There are also two Winn Dixies in our town, two Rouses, a SuperTarget, and countless Dollar Generals and Dollar Trees. There's one local grocery store, and it does well (it has a great cheese and alcohol selection), but the prices are way too high- even on generics you can get at any other store. Sadly, sometimes it's just easier to suck it up, drop your morals, and go to the big chain stores.
To get the most for my money, I prefer the larger stores. They take my coupons and I can walk out with tons of stuff and only pay a few cents after coupons. Most of the small local stores feed off the bigger stores. They go to these bigger stores to buy their stuff at discount then turn around and resell at three times the cost they paid for it. The big stores do have some people that give excellent customer service so I'm not going to say that just the small stores have the best customer service.
It depends on what you're getting. Normal stuff, like toothbrushes, razors, toilet paper, paper towels, etc etc you can get for far cheaper at a big box stores. We were looking for flowers for our front garden the other day, and the smaller place we were looking at had insane prices! We went to Wal-Mart, and their flowers were miles cheaper. Though, some things, like tire and lube and car repairs, it's much cheaper to go the smaller/privately owners garages, because the chain places cost way too much. I do honestly think that it really depends on what it is that you're purchasing though.
Small stores are often more expensive than big ones. That is mainly because they can't buy in bulk so they don't pay wholesale to resell. I find that to be very noticeable at pet stores. If you go to smaller pet shops things are outrageously more expensive than going to specialized large chain pet stores. Not to mention they have less variety.... so I will usually buy in bigger stores.
When money is tight, I always go for the big stores so I can save money. I try and support my local stores, but it really depends on their selection and service. Yes, I'd feel bad if they went out of business, but if the lady behind the counter can't even treat me with respect, then they deserve to go out of business.
