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On a recent weeknight in Shanghai, customers packed one of the city’s six Sam’s Clubs, scouting for deals among the wide aisles stacked to the ceiling with groceries and merchandise.

“At least half our family’s stuff is bought here,” said Peter Xu, a 34-year-old shopper at the front of a long queue for free samples of Chaoshan beef noodles.

Sam’s Club, Walmart’s warehouse chain, is one of China’s fastest-growing foreign retailers, with 56 stores in the country and plans for 60 by the end of the year, said a person familiar with its expansion. This compares with seven China stores from Costco, the dominant warehouse club operator in the US.

Even as economic momentum has slowed in China, Sam’s Club’s income from memberships there grew more than 40 per cent year on year in the first quarter, as consumers flocked to the warehouses for their low prices and bulk purchases.

China, one of Walmart’s three international growth markets alongside India and Mexico, may be its most fraught. The world’s second-largest economy is grappling with weak consumption at a time when trade tensions with Washington have risen.

The company not only has stores in China but also purchases billions of dollars of goods there to feed its primary business in the US.

Sam’s Club has “inculcated itself into the fabric of Chinese life in a way that people would probably forget it’s an American company”, said Bryan Gildenberg, managing director at Retail Cities, a consultancy.

The warehouse club business was pioneered in the US in the 1970s. Customers pay annual fees for entry into utilitarian big-box stores carrying a limited assortment of several thousand products sold in bulk at a modest mark-up.

Walmart entered China in 1996, five years before the country joined the World Trade Organization, with a Walmart-brand hypermarket and a Sam’s Club in the southern city of Shenzhen.

An urbanisation wave in the early 2000s led to a Chinese supermarket boom, but it has lost steam in the past decade with the rise of digital retail. Walmart, France-based Carrefour and even domestic bricks-and-mortar retailers such as Suning have struggled to keep up with local app-based commerce, some of which has been subsidised by the government.

Walmart has closed dozens of its hypermarkets in China since 2020, leaving about 280. The Arkansas-based company has exited other markets entirely, including the UK, Japan and Argentina.

But with Sam’s Club, Walmart has found a way to expand in China by deploying warehouses as both shopping destinations and ecommerce delivery hubs. The chain accounts for 80 per cent of Walmart’s sales in the country, according to Oliver Chen, a retail analyst at TD Cowen.

Walmart’s sales in China rose 17 per cent to $20bn in its latest fiscal year. Eight of the Sam’s Club stores are forecast to each register half a billion dollars in sales this year, Christina Zhu, chief executive of Walmart China, told investors in April. A Walmart spokesperson declined a request for an interview with Zhu and would not comment on the company’s business in China.

Even as China’s economy cools, the company believes there are opportunities to sell to the millions of middle and upper-middle-class consumers who can afford the membership fees, which start at Rmb260 ($36) a year. Goods range from sea cucumbers and Fuji apples from Gansu province to toys such as Land Rover monster trucks and Mickey Mouse swimming sets.

“There are definitely still groups of consumers out there who want to be surprised, who want the treasure hunt experience,” said Weiwei Xing, a Hong Kong-based partner at Bain & Co focusing on consumer products.

“A member [in China] told me she doesn’t have to shop around for the best prices . . . because . . . she trusts that Sam’s Club is always going to have the lowest prices on whatever it is that her family needs,” Kathryn McLay, chief executive of Walmart International, told investors in April.

Half of Walmart’s China sales are online, compared with less than 20 per cent in the US. To fulfil ecommerce orders, China CEO Zhu described Sam’s Club locations as “mother clubs” that stockpile goods for networks of eight to 15 delivery hubs serving dense neighbourhoods within a three-mile radius.

One curb on Sam’s Club’s China growth is a shortage of affordable and suitable land, which is owned by local governments and a crucial source of fiscal revenue.

Walmart executives are also dealing with strained US-China relations that have worsened with US President Donald Trump’s steep tariffs on Chinese goods. About a third of Walmart’s US merchandise is imported, with China a leading source.

The view inside Walmart is that it has become more complicated to be an American company in China. Authorities summoned executives this year over reports the US retailer had asked suppliers to cut prices in response to Trump’s tariffs, according to state media. The retail giant had also warned it was not be able to “absorb all the pressure” from the duties and would need to raise some US prices as a result.

But the company’s long-standing presence in China has raised hopes it can weather potential frictions. One person with knowledge of Walmart’s retail business in China said it was in a “non-sensitive sector” and could “help to keep a foundation of co-operation between the countries”.

Deborah Weinswig, chief executive of retail consultancy Coresight Research, said Sam’s Club’s longevity in the country and efforts to sell local products meant it was “looked at as a more native company in the market than others”.

At a Walmart in Shanghai packed with local products including dried mushrooms commonly used to make soup, one 66-year-old customer who had been shopping there for “many years” said: “The bad relations between the US and China have no impact on us.”

Additional reporting by Wang Xueqiao in Shanghai

Thousands of businesses and households are waiting to connect to the Dutch grid, forcing network operators to ration power in an early indicator of what other European countries are likely to suffer as the speed of electrification increases.

More than 11,900 businesses are waiting for electricity network connections, according to Netbeheer Nederland, the association of Dutch grid operators. On top of that are public buildings such as hospitals and fire stations as well as thousands of new houses.

Dutch officials and companies said lengthy waits for connections were holding up economic growth and could force businesses to rethink their investment plans. Despite efforts to invest in new cables and substations, new connections in some areas of the country will only become available in the mid-2030s, according to network operators.

Although the bottlenecks in the Netherlands are particularly acute, analysts say it is a harbinger of what is likely to occur in other EU countries, as the speed of electrification increases to meet the bloc’s ambitious decarbonisation targets.

“There is congestion in other countries”, but other countries should “definitely” see the Dutch example as a warning, said Zsuzsanna Pató, power team lead at the Brussels-based energy NGO RAP.

A Dutch official acknowledged: “It’s nowhere near as bad anywhere else.”

The Netherlands is among the countries in Europe to have moved fastest to electrify critical parts of the economy after it in 2023 ended production at its giant onshore gasfield, Groningen. More than 2.6mn Dutch homes now have solar panels on their roofs, Netbeheer Nederland figures show. Companies also accelerated their move away from gas after the EU’s energy price crisis in 2022.

The country had been so used to relying on its gas resources that power grid upgrades had not kept pace, its national power grid operator, Tennet, said.

To provide the grid capacity required, the Dutch government estimates the level of investment needed in cables and new substations to be in the region of €200bn to 2040.

Some of that can be funded through the sale of Tennet’s section of the German power grid to private investors, which is valued at about €20bn, according to officials involved in the talks. But much of the rest will have to be covered by the amortisation of assets, with consumers fronting the cost.

The Netherlands already has some of the highest electricity costs in western Europe because of the grid bottlenecks. Monthly prices are, for example, roughly €30 per megawatt hour higher than they are in France this year, according to data from the think-tank Ember.

To cover the necessary investment, tariffs are expected to increase each year until 2034 by an average of between 4.3 and 4.7 per cent in real terms, a presentation from Tennet said.

To free up capacity, Tennet and regional grid operators have started to offer contracts to households that discount electricity used at non-peak times, such as between 11am and 3pm, and other flexible contracts that allow users to pay for electricity in time blocks.

From April 1, operators could offer contracts where large industrial users are barred from using their connections at all during certain busy hours in exchange for lower tariffs.

The Hague has also put out a “more conscious use of energy” advertising campaign across TV and social media that asks consumers to charge bikes and cars outside of the 4pm-to-9pm peak, when the grid comes under greatest strain.

But local leaders are still worried that their regions will lose investment if the queues for connections endure.

“Everything is going electric and electricity infrastructure needs to grow massively everywhere,” said Jeroen Dijsselbloem, mayor of Eindhoven.

The Brainport region around Eindhoven, covering 750,000 people in several municipalities in the southern Netherlands, had lost investment because it had to ration power supply, he said.

Brainport is also home to a cluster of advanced technology companies led by ASML, the maker of the world’s most sophisticated chipmaking machines. No significant new grid capacity would be installed in the region until 2027, Tennet figures show.

“We need more than 100 medium-size substations and 4,000 small substations,” Dijsselbloem said. Grid operators are also short of 28,000 technicians to install the necessary infrastructure, according to Netbeheer Nederland.

Companies such as Thermo Fisher, a US medical business with a base in the Eindhoven area, have maintained their growth plans but invested in on-site battery storage and solar to counter the grid congestion issues.

“We continue to work with local officials and authorities to find a long-term solution on power grid capacity,” said Steve Reyntjens, leader of Thermo Fisher’s Eindhoven site.

In the meantime, the Dutch energy ministry and network operators are looking at ways to safely increase the load on the grid without causing blackouts like the one across the Iberian peninsula in April.

There are also initiatives to pool connections and create “energy hubs” that share grid access.

Eefje van Gorp, spokesperson for Tennet, said that other countries should beware. “Belgium is in trouble. The UK is in trouble. In Germany there’s lots of trouble because in Germany all the wind is in the north and the demand is in the south.”

The EU is consulting on legislation addressing the need for grid upgrades and to further accelerate permitting for grid infrastructure projects before the end of the year.

But analysts fear this will offer little immediate relief. “To build a grid takes five to six years. There’s no silver bullet,” Pató said.

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Renault is preparing more than 20 new models that will each be developed in less than two years in one of the most ambitious projects as western carmakers turn to fewer components and artificial intelligence to match the engineering speed of Chinese rivals.

The French group and other legacy carmakers from Volkswagen, Nissan to Stellantis are tearing down vehicles made by BYD and other Chinese carmakers, hiring Chinese engineers and learning from their joint venture partners in China to compete against an influx of new products that are cheaper and yet equipped with more advanced software.

What sets it apart is its ability to leverage its smaller scale to be nimbler to adapt to market changes, building a continuous flow of new electric vehicles in half the time it historically took to build a car. While other non-Chinese carmakers have announced similar ambitions, they have yet to implement the speed promised by Renault.

“We have a chance in Renault to be small in volume, very focused on our markets . . . and be faster than the big Volkswagen or Stellantis,” said Cédric Combemorel, its deputy chief technology officer.

Renault will release an all-electric new Twingo next year, after two years of development compared to the four it previously took. After Twingo, it has more than 20 projects, including its new Dacia minicar, which it aims to launch in 2027.

The Dacia minicar was developed in just 16 months — a record for western brands and even faster than the Chinese average development time of 18 to 20 months. Both vehicles will be produced at its plant in Slovenia.

The strategy was developed by Luca de Meo, who is to take over luxury group Kering, but executives say Renault will continue to find ways to execute his plans even after his departure.

Despite Renault’s optimism over executing its strategy, rival executives question whether the French group, and other legacy carmakers who follow, can produce a continuous flow of new vehicles that match the Chinese at speed and cost.

According to Alexandre Marian, partner at AlixPartners, not only can Chinese carmakers bring new cars to market at twice the speed, they can do so with up to 50 per cent less investment while using parts that are 30 per cent per cent cheaper than their western rivals.

Tighter deadlines, faster decision-making, software development, and in-house development of components are among the factors that make this possible. “On all levels it helps them win,” Marian added. 

Combemorel said the faster development cycle also required fewer and simpler parts. For example, including the number of vehicle colours, Renault also used to offer up to 220 options to consumers — compared with just 15 for some Chinese brands. 

“Frankly, the Chinese have learned for a long time from the Europeans, and now we’re turning this around so we learn something from them,” said Guido Haak, Renault’s chief programme officer. 

A bigger challenge for Renault is “culture change” internally and among its suppliers, who will need to demonstrate that their components are not only essential but can also be developed faster.

To accelerate the shift, Renault has invested €26mn to build a simulation centre just outside Paris that houses an 8-tonne carbon-fibre pod to test prototypes of future vehicles on virtual roads to save both time and cost. 

For each new model, a so-called “digital twin” is created so that designers and engineers anywhere in the world can work on vehicle development together virtually, and problems can be fixed before a physical prototype is created. 

Renault also uses artificial intelligence to monitor any risks that could cause disruptions to its supply chains — which it claims has also helped to reduce vehicle delivery times by 60 per cent.

As western carmakers use the same methods to make vehicles like the Chinese, some analysts warn of the risk that the end products would start to look similar. 

Haak stressed that Renault could still differentiate its cars with exterior design as well as experience inside the car. 

“With the Chinese, you have a lot of very similar cars,” he said. “The most important thing is to understand your customer needs and that is what should differentiate us. If we’re not doing that, we have lost it.”