You're claiming that corner stores - independently owned entities in expensive real estate selling cheap commodities - should be able to sell products as cheap

You're claiming that corner stores - independently owned entities in expensive real estate selling cheap commodities - should be able to sell products as cheap or cheaper than Wal-Mart? Things are more expensive in corner stores because it's more expensive to run a corner store. You don't have as many customers, but you have higher expenses. You can't stock a larger variety of goods because space is limited and you have to move the lightest, most profitable goods to stay afloat. You can't dedicate $20,000 worth of real estate (one corner of your shop) to 12 kinds of salsa.