There is a size of city that is death for a regional grocery chain.
Not a small town. Small towns are safe, because no national chain wants them.
Not a huge metro either. Those are big enough that a strong local operator can carve out a real business in specific neighborhoods.
The dangerous size is the mid-sized metro. A few hundred thousand people. Big enough that every national chain builds there. Small enough that there is nowhere to hide.
In a city like that, a local grocer is in a direct fight with a supercenter, a national supermarket chain, a warehouse club, and a growing discounter, all at once, on the same streets.
Most of them lose. The American grocery landscape is a graveyard of chains exactly that size.
So what does the rare survivor actually do differently? Because it is not one clever idea. It is a handful of unglamorous decisions repeated for decades.