an ‘east cost big city’
Which one?
Anyhow, it has nothing to do with them thinking that (the collective) you look drab or silly. It has to do with their profit. (Maybe they’re hoping that you think you look drab and silly).
Are they allowed to compete with local businesses? That’s a Choshen Mishpat shailah (hasagas g’vul) and a posek would need to hear all details to make that determination. You certainly have the right to decide to give your business to the local merchants.