Demand/Market.

While local services are close, transportation and distribution can be a real bitch in cities.

Imagine how everyone in the city has meat for dinner and everyone has to take a shit afterwards. Yet, the meat doesn't grow in the city and the shit isn't piled up on the streets

It's an ever going cycle of meat and shit being transported in and out of the city every day. The city is pulsating, with ground beef and shit.

Probably the largest factor is cost of overhead.

What that means is, while the products themselves cost the stores the same amount to buy inventory, it costs them more to actually provide them to customers.

Rent is higher, both for retail space, and storage space. Labor is more expensive,because workers living in cities need higher wages to live. Transportation is more expensive, because railways and large trucks are more difficult (or impossible) to use in downtown areas. And lastly, the owners need to make more to live in these same conditions.

Because the rents and property prices are higher, both for businesses and those workers who are fortunate enough not to be stuck on the minimum.

I have tried searching it but it gives following results:

• higher taxes? - In my country taxes are same everywhere

• rent? - In cities rents are higher, because more people are on reach of shop. So owner pays more in rent to sell more goods than when he would sell them in worse location otherwise. He makes bigger profit in return.

• higher salaries? - People have more money. People buy more things. Thing get pricer in cities. Cost of manufacturing product doesnt depend on location of sell. Factories adjust by sending more products to cities instead of less dense location. Market balances and price is same everywhere. (A bit higher althought)

• transportation from factory to city? - I would say its opposite due to economics of scale. Train transports products to distribution centres around city. Inside city delivery truck travels less distance to supply more shops. On the other side truck has to ride much longer distance to supply less shops.

• higher demand? - People in cities consume more? Same story as with salaries apply here.

• perceived value?! - Maybe I have started to look for answers too hard

• weather?! - This could make sense in some cases like heat island and cold products

Are they? I have the ability to go to a competing store and choose the cheapest option, there are several rivalling supermarkets around, even the fuel tends to be cheaper once you have several petrol stations in close proximity.

Price discrimination - "The people here can afford to overpay." Happens on an international scale too.