Because costs are also high. A large supermarket takes up vast amounts of expensive real estate both for the store itself and for parking. There may be a wareh

Because costs are also high. A large supermarket takes up vast amounts of expensive real estate both for the store itself and for parking. There may be a warehouse as well (though those can generally be put on less-expensive real estate). Not only does the real estate cost a lot to begin with, property taxes are an ongoing expense. Many of the major grocery chains are unionized, and pay (relatively) high wages. The dollar stores are more likely to pay minimum wage or maybe a bit more. As others have noted, a lot of meat and produce winds up being thrown out because it's going bad. That's spendy, especially for meat. Then that huge space has to be heated and cooled to keep the humans comfortable and you also need to pay for the electricity to run gigantic refrigeration and freezer units for the food. This is made worse by the fact that the freezer units have to be powerful enough to handle people opening and closing them all the time, and the fact that they need to have glass doors so people can see what's in there. Sometimes the freezers and often the meat/dairy refrigeration are actually open to the air, without doors of any kind. And so on.