It’s a deliberate tactic. Saturate the market, lose money while your smaller competitors can’t, then return to normal when your competitors are gone. Whomever is left standing gets an unchallenged monopoly. It’s why Starbucks will open stores beside competitors.
That's part of it, especially when it is a national chain coming in that can afford to subsidize a loss to compete. The other side of the coin is that there are areas with non-chain liquor stores on every corner and they've been like that for decades. Maybe the customer base for these sort of stores is simply larger than you might have figured.
