Yeah that can be true. Not all local businesses are competitively run.
While it’s true they don’t have the same economies of scale as large corporations, they also don’t have the same overhead. Starbucks coffee stands support a skyscraper full of bureaucrats somewhere. And Starbucks corporate has a stock price to worry about. Local shops don’t have all that crap, and can often get away with charging less. My dad just charged 15% below the corporate shop down the block, as a rule, and it was still profitable.