Probably the largest factor is cost of overhead.
What that means is, while the products themselves cost the stores the same amount to buy inventory, it costs them more to actually provide them to customers.
Rent is higher, both for retail space, and storage space. Labor is more expensive,because workers living in cities need higher wages to live. Transportation is more expensive, because railways and large trucks are more difficult (or impossible) to use in downtown areas. And lastly, the owners need to make more to live in these same conditions.
Because the rents and property prices are higher, both for businesses and those workers who are fortunate enough not to be stuck on the minimum.
I have tried searching it but it gives following results:
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higher taxes? - In my country taxes are same everywhere
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rent? - In cities rents are higher, because more people are on reach of shop. So owner pays more in rent to sell more goods than when he would sell them in worse location otherwise. He makes bigger profit in return.
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higher salaries? - People have more money. People buy more things. Thing get pricer in cities. Cost of manufacturing product doesnt depend on location of sell. Factories adjust by sending more products to cities instead of less dense location. Market balances and price is same everywhere. (A bit higher althought)
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transportation from factory to city? - I would say its opposite due to economics of scale. Train transports products to distribution centres around city. Inside city delivery truck travels less distance to supply more shops. On the other side truck has to ride much longer distance to supply less shops.
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higher demand? - People in cities consume more? Same story as with salaries apply here.
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perceived value?! - Maybe I have started to look for answers too hard
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weather?! - This could make sense in some cases like heat island and cold products
Businesses in cities may pay city taxes and county taxes, so a double dose.
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Are they? I have the ability to go to a competing store and choose the cheapest option, there are several rivalling supermarkets around, even the fuel tends to be cheaper once you have several petrol stations in close proximity.
I feel like Inflation is not hitting me as much as my suburban friends. They keep complaining about the big grocery store chain collusion (they got caught increasing bread prices a few years back).
Where I live there’s line 3 mom&pop produce/pastry/butcher between me and the big chain grocery store. My big chain grocery store is cheaper then other store of the same franchise.
We built huge expensive highway sso huge corps could build mega stores that killed all the locally owned stores. Now they so what they want.
Okay, fair point. I bet inflation and changes in the markets affects big shops with complicated supply chains even more. And at several steps in the process at once. Also their margins are small so they need to hand down increasing prices quickly.
Price discrimination - “The people here can afford to overpay.” Happens on an international scale too.
This, all those comments about rent and such are wrong. I mean, they are right, but they are wrong. The main reason that prices in the city are high (including why rent in the city is high) is that people are willing to pay that price. Nothing else. Stop paying 20shmekels on avocado beer, the price of avocado beer will go down.
