This is precisely what happens in cities.

Not in my experience, but I'm sure it varies with location and how "functional" the city is. But on the whole, for me big metros have had much better selection and decent prices on the whole.

It's true that won't always be at the small place literally on your own corner. And some of those places bump prices a fair bit in exchange for being open at most hours. But a little searching and you will find many gems.

You can't really get the costco/wallmart experience easily in city cores, but I don't really want it so no loss there (for me). If you want one-stop shopping you are going against the grain, really.