In most cases, the business owners are unwilling to take the time. Market research is incredible important when running a business, and by not doing it, you are going into a market that you have no idea about. This can hurt the business in the short-term because they won't know which demographics to serve, how the location they're in contributes to their sales, what products or services are popular, and if there is a lot of competition in their market. All these can have negative impacts on the business and it's why market research is so important!
It can also be because they don't know how to do it. Most business owners don't really know how to research demographics and competition, so they tend not to do it, or hire others who how to do it.