Unfortunately, I think a lot of people think this way. They assume the big chain will have better quality, better selection, lower prices, longer hours -- and they may or may not bother to check those assumptions against the reality of their particular business community.
I am happy to say I have learned better, and as the owner of my own small business, I have a whole different appreciation now for the unique challenge of competing against the guys in the Big Boxes. What people who bypass their local businesses miss, is the local business owner's commitment to his community, his flexibility and ingenuity, and his willingness to accommodate your needs. The owner of a local business, because she is local, can, and will, learn the names of your kids, your shoe size, your food allergies, or whatever else she may need to know about you in order to serve you better than a big chain ever could.
Although it's not always the case, it often seems that the local business will have a tough time competing on price. So if you're a local business owner, here's today's news flash: Don't try to compete on price! Most of the people I know would gladly pay a little extra to be confident of the quality of the product, of its freshness or its solid construction or its state-of-the-art design. Most would gladly pay extra for a meaningful guarantee of quality and helpful service that didn't require the "extended warranty" surcharge. And most would go back to a place where customer service meant more than a fast check-out and a cursory "have a nice day."
Most would love to interact with "associates" who feel some genuine association with the company that issues their paychecks, much the way it was before the turn of the last century, when small local businesses comprised the overwhelming majority of commercial enterprises.
Who are your competitors? What share, of whose wallet, are you seeking? And how do you establish yourself as the vendor of choice for the benefits your products and services confer? Is there anything you might need to do differently, if you want people to get out of the box (the Big Box, that is) and do business with you instead?