[gjm11]

Not quite.

Hypothetical example: Initially a town has two shops A and B. A sells high-end goods at high-end prices. B sells low-end goods quite cheaply. Most people buy mostly from B but get their luxuries from A. Now Wal-Mart moves in. It sells low-end goods cheaper than B, and highish-end goods cheaper (but lower quality) than A. Some people are quality fanatics and continue to get their high-end goods from A, but most of A's customers care about convenience as well and therefore get Wal-Mart's highish-end goods there since they're buying their ordinary stuff there too. Result: A no longer gets enough custom to turn a profit and shuts down, and now everyone gets everything from Wal-Mart.

The low prices help, I'm sure, but I bet convenience matters more. (Single anecdotal datapoint: I am a very price-insensitive food buyer, but I get almost all my food from supermarkets simply because it's so much more convenient than going to lots of different shops, possibly discovering after buying half the ingredients for a meal that something important isn't available, etc. FWIW I'm not in the US, so it isn't Wal-Mart I'm buying from.)