What the heck is wrong with New York grocery stores?

I normally live on Cape Cod but I've been staying in Manhattan for the past week. I'm having a great time and loving the city but I have a question for any Manhattanites reading this post: why is everything at the grocery store at least 30% more expensive than it is on Cape Cod, or pretty much everywhere else I've been with the exception of Nantucket?

I just saw a box of shredded wheat -- $5.69, which is especially bad when you consider the fact that cereal boxes have been shrinking over the past year because of rising commodity costs.

Now I don't really consider myself a miser. But let me be clear: I refuse to pay $5.69 for a box of cereal. I would rather head over to Central Park on my hands and knees armed with a bottle of blue cheese dressing and forage. Part of the problem may be that Wal-Mart has not yet been able to colonize New York in the face of opposition from union leaders and socially-conscious types. I'm all for principles and whatnot -- but not if it means paying $5.69 for a box of cereal!

If you live in New York, it may actually be cheaper to buy some groceries on Amazon.com: you can get Post shredded wheat, 12.2 ounces, for $3 per box in packs of 6. Shipping is free if you spend more than $25.