Frugal living seems bad for the local economy

Theoretically, being frugal is good for yourself in the short-term, but bad for you and your local community in the medium to long-term is frugal living becomes popular, as local businesses would collapse from lack of sales, or would dramatically increase the sale price of their goods and services in order to afford their business running costs from the little items they do sell. Most businesses would just close or move to another town/city where frugality is not as popular. Any thoughts?