Presumably if you had bagel shops in every residential neighbourhood, each would sell less and have largely the same fixed costs and so prices would have to be higher.
Possibly, but I imagine they could get by with less square footage, and in a less expensive space, so rent would be substantially less. But, yeah, oven and other cooking apparatus is probably the same regardless of scale (up to whatever size starts requiring duplicates).
And from a societal perspective, saving on commute time/expenses but with $15 bagels is still better than wasting 2+ hours/day, additional car expensises, and only a $7 bagel.
A huge bagel store will use humans more efficiently than a small one.
One big problem with "lots of shops" is that they require lots of retail workers, workers who spend much of their paid time not working. Prices reflect that.
It's unclear to me why urbanists think that wasting humans on retail is so important.
Stuff at small stores costs more money than stuff at big stores. As you point out, labor efficiency is one of the reasons, but there are others too. Regular people know this very well. The “urbanists” active in HN threads are typically well-off enough that they don’t care about whether their grocery bill is $50 or $60. That’s good for them, but expecting everyone else to follow suit is rather out of touch.
