Cost of living is indeed bad but nowhere nearly as bad as you portray it. While food and rent is really expensive compared to the surrounding countries other things (e.g. Gasoline, Electronics) are cheaper.

Also the high prices often also have a quality bias with the Swiss normally buying higher quality. An example of this is discounters such as Aldi or Lidl having a small market share even though they offer fresh products (which they do to a much lesser extent in other countries).