You are partly correct to note that local markets are often not economical, but the reasons for that are precisely low density, car dependence and restrictive zoning.
For a local market to be economical it needs a catchment area containing enough customers.
Once customers start driving they prefer to drive a bit longer to go to a mega market or mall with good parking options, i.e. not a local market.
Local markets thus have a catchment area that is defined mostly by walking and biking.
(Not having a lot of parking can also help to make local markets more economical)
Some important conditions for local markets are then:
1. Zoning needs to allow the shop to be very close to residential areas, and with only few parking spaces.
2. Residential density needs to be high enough to have a large number of customers within walking or biking distance.
3. Walking and biking should be sufficiently safe and pleasant.
It is easy to see the why there are few local markets in suburban North America, but they are very common in urban places all over the world, as well as in thoughtfully designed and slightly denser suburbs in many countries.
For a local market to be economical it needs a catchment area containing enough customers.
Once customers start driving they prefer to drive a bit longer to go to a mega market or mall with good parking options, i.e. not a local market.
Local markets thus have a catchment area that is defined mostly by walking and biking.
(Not having a lot of parking can also help to make local markets more economical)
Some important conditions for local markets are then:
1. Zoning needs to allow the shop to be very close to residential areas, and with only few parking spaces.
2. Residential density needs to be high enough to have a large number of customers within walking or biking distance.
3. Walking and biking should be sufficiently safe and pleasant.
It is easy to see the why there are few local markets in suburban North America, but they are very common in urban places all over the world, as well as in thoughtfully designed and slightly denser suburbs in many countries.