That probably depends on the country and what you mean by small. Smaller shops/supermarkets in Denmark tend to be cheaper, because they are run mostly as discount brands, while the larger stores a premium brands and have the more expensive options.

However, Danish supermarkets are generally kept small by regulation, meaning that there are very few supermarket that could be considered big by international standards.

For a first world country, Germany has ridiculously low food prices. These are found at the chain supermarkets (Aldi, Lidl, etc.). They tend to be small by American big box standards (perhaps 1000sqm, so maybe 3x the size of a bodega). There's a lot of these supermarkets everywhere in the country, most people can easily come across them during usual daily trips.

Yes shops in dense urban areas are overall more expensive but there are discount stores like Lidl too. For higher quality products the difference is marginal (if you can even find an equivalent in a big suburban store). Having experienced both, my feeling is that it evens out if you account for the running cost of a car used often or delivery.

Yes - groceries in a small shop are easily 2x the £/calorie in the UK compared to a big superstore.