I think consumers really do make this choice, and aren't very compromising. People have a high expectation for both the variety of products, and the variety of a single product.

As a result, the different people have very diverse diets, and it is unlikely that a small store would satisfy most of them.

For example, each week I shop from 2-3 different supermarkets that are 60k ft^2 each (6k m^2).

And an individual consumer probably doesn't take advantage of all the choices on a weekly basis but in aggregate they do. I have a couple of convenient supermarkets and I don't shop at both weekly but I recognize that each is better for certain things. And Trader Joe's and Whole Foods are even better for others although neither are close enough to make a special trip for the most part.