I live in an area where the Tom Thumb is the ONLY clean and tidy grocery store for miles. I don't find the prices significantly higher for what I buy. When I put it all together I am better off shopping at Tom Thumb than driving a lot of miles to shop elsewhere. If I lived it a ritzy area it might be different with compeition.
Several grocery stores in my area have closed in the past few years as we are on the 'poor' side of the DFW Metroplex.
As is often mentioned by the wise on this topic, you have to make your own decisions.
The advantage of living in my area is that you can sure buy a nice house cheap!