Oh, they might buy a smaller car, but they aren't going to start walking 3 miles to the store.
Of course nobody is going to walk 3 miles, that's stupid. However, riding 3 miles on your bike is trivial. You'll be there in 15 minutes. I do this about twice a week, and driving wouldn't be any faster than biking.
I think the reason people don't consider biking is because bikes in america are weird. Everyone wants to get a very cool mountain bike. Then it rides poorly on the street, and it can't carry anything, so they assume bikes are useless. I noticed that when I was in Tokyo, every bike on the street was of the useful variety. They all had chain guards, fenders, and racks, which makes casual riding an enjoyable experience. Maybe if you could go to a bike shop and see bikes like this, people would use them for grocery shopping.
In the US, it appears that most people think bikes are a fun thing to ride to kill time on the weekend. I wish we could change that perception somehow.
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What is stupid about that? Every day at lunch a group of 4 of us go on a three mile walk. Most days we stroll and it takes an hour.
If I had my own cart I could certainly do that once a week.
OK, so no more meat every day, but I could still have eggs every day and milk some days. And I still wouldn't need to use any refrigeration. And since I live within 3 miles of several farms and have a bike, I could make a few milk/meat trips a week. I would probably be drinking sheep's milk and eating mutton more, because that is what is close, but that still sounds fine.