The era of one-stop grocery shopping is over
ican tariffs on imported Chinese cars. Europe last year opened a probe into Chinese electric-vehicle subsidies that is likely to result in import tariffs in the coming months.
China’s car exports have nearly quintupled over just three years to about five million vehicles in 2023, partly triggering the American and European concerns. Three-quarters of the exports last year were internal-combustion-engine cars, with many going to Russia, though the number of EVs shipped overseas is also growing.
Chinese officials say that criticism of its auto-industry policies is unfair and that Chinese cars are innovative and offer good value—a point many autoindustry experts and foreign carmaker executives make as well. The U.S. also uses government support to promote its electric-vehicle industry, through the Inflation Reduction Act, which China has challenged at the World Trade Organization.
What is clear is that China’s auto industry is in expansion mode, even as its domestic sales growth has slowed.
At the Auto China exhibition in Beijing, the biggest car show in the country, which started Thursday, nearly 300 electric and plug-in vehicle models are being exhibited. They include a sporty electric sedan introduced by Xiaomi, a Chinese smartphone maker that has just entered carmaking and plans to deliver 100,000 of the vehicles this year.
Unleashing ‘new productive forces’ Beijing long ago identified EVs as an industry it wants to dominate, and many local governments have competed to develop new automakers that can bring jobs.
The urgency to do so has increased over the past year, as other parts of China’s economy have stagnated and Chinese leader Xi Jinping has called on local leaders to promote “new productive forces”—a buzzword in Chinese policy circles for the need to promote high-value manufacturing industries.
Government support for the industry includes below-market-rate loans and discounted steel and batteries for automakers, according to the Germany-based Kiel Institute for the World Economy in a report in April.
BYD, China’s biggest electric carmaker, received about $3.5 billion in direct government subsidies between 2018 and 2022, the institute said, citing BYD’s annual reports. BYD didn’t respond to a request for comment.
Overall, China spent roughly $173 billion in subsidies to support the new energy-vehicle sector, which encompasses electric and plug-in hybrid vehicles, between 2009 and 2022, according to the latest estimate available by Scott Kennedy, a researcher of China’s economic policies at the Center for Strategic and International Studies.
Only four EV brands in China’s market sold more than 400,000 vehicles each last year—a volume viewed as a break-even point for EVs based on historical financials from Tesla, AlixPartners’ Dyer said. The four were BYD, Tesla, Aion and Wuling.
Some Chinese EV makers have gone out of business in recent years, and top
have at times spoken openly about the need for more consolidation.
In March, Premier Li Qiang said in an annual government work report that China would consolidate and enhance its leading position in industries including new energy vehicles.
But Li also emphasized Beijing’s intention to keep investing in high-end manufacturing, repeatedly using the phrase “new productive forces.” Local governments, which take cues from Beijing on economic priorities, have responded by backing automakers in their areas.
Supporting struggling companies In February, the city of Zhengzhou in central China vowed it would foster “new productive forces” industries and become the “city of new-energy vehicles” with an annual capacity of 700,000 for such cars.
A month later, a state-backed entity in Zhengzhou temporarily took over the assets belonging to the local unit of Haima Auto, which has close to 3,000 employees and a plant there. In the first three months of the year, the struggling carmaker sold fewer than 2,000 cars, a company filing showed.
The five-year deal provided Haima with the equivalent of about $27.5 million in needed cash. Haima said it would focus on boosting exports in markets such as Russia and Vietnam to drive growth.
At Zhido, the mood upon its recent restructuring was euphoric. At a packed mid-April event, the company’s founder, Bao Wenguang, raised his hands in the air and exclaimed, “Zhido is finally back!” a video of the event showed.
Ren Zhenhe, the local Gansu governor who visited its plant, was quoted as saying then that he hopes the carmaker can play a role in enhancing “new productive forces.”
At one point, between 2014 and 2017, Zhido was among China’s bestselling electric-vehicle makers, specializing in mini electric cars. Back then, purchases of such small electric cars were subsidized by the government.
When Beijing ended that policy as it tried to encourage longer-range EVs, sales tanked, leaving Zhido with debts of around $250 million, according to documents from an online platform run by Alibaba Group for judicial auctions.
After its restructuring in October, which involved a unit of state-owned company China Three Gorges and Chinese automaker Geely, Zhido is now aiming to double sales annually through 2026 and release 16 new models by 2028. It plans to expand production capacity at its plant in Gansu to 300,000 vehicles a year and “actively cultivate overseas business.”
Harking back to the days before supermarkets, Americans are dividing their food shopping among more stores to save money.
Consumers bought groceries from an average of 20.7 different retailers between March 2023 and February 2024 according to data firm Numerator, up 23% from the same months between 2019 and 2020. In addition to visiting more stores, shoppers are also traveling to cheaper ZIP Codes to shop and pursuing loyalty programs and promotions in greater numbers, retail analysts say.
Treasure-hunt grocery shopping is the latest example of consumers changing their behavior in response to the higher of prices in our lives, from the homes we live in to the daycares where we send our kids. Now, with groceries taking up the highest percentage of household budgets in 30 years, more shoppers are driving all over town in pursuit of deals.
Every Sunday, Lorin Augeri sits down at her Tampa, Fla., kitchen table with a pen and notebook to fastidiously plan her family of four’s meals for the week and plot out where she’ll purchase each ingredient. Some are from private-label brands only carried by certain retailers, while others are available in bulk or set to go on sale a certain day that week.
Keeping the household grocery bill under $250 a week now requires stops at Costco, Target, Publix, Sprouts and more.
“There are other things I would love to be doing and spending my money on, but right now we need to be focusing on what’s truly essential,” says 35-year-old Augeri, who runs operations for a tourism company.
A new normal
Grocery prices are up 21% in three years, according to the Labor Department, helping drive the trend toward multistop shopping, consumer researchers and retail analysts say. Overall, grocery shoppers are making 8% more trips than they did last year, says consulting firm AlixPartners, and buying fewer items at each stop.
Traditional grocers ate up 66% of total consumer spending on food at home in 2022 according to the U.S. Department of Agriculture, the most recent year for which data is available. That’s down from 69% in 2017.
Roger Beahm, a marketing professor at Wake Forest University School of Business, says some food stores are now leaning into differentiation rather than trying to be all things to all people
“Retailers are looking at specific categories that they can excel in and being able to offer consumers superior products in these,” he says.
Lidl, a discount grocer, is trying to offer the best possible price on the item its shoppers are most likely to buy that week, and ideally hook them for the long haul. For Cinco de Mayo, that means six cans of beans for $4 and two-for-$5 bags of mixed cheese.
“We want to promote many items at cost or below to meet the customer where their preferences are,” says Frank Kerr, who oversees customer experience for the brand.
Stores are also putting a greater focus on their own private label or store brands, which are typically cheaper than national brand equivalents. Sales of store brands were up 15% for the 52 weeks ended March 23 over the same time in 2022, according to AlixPartners.
Worth the schlep Living in Brooklyn, N.Y., Michelle Young almost always chose proximity over price when it came to food shopping. That was before her youngest daughter transitioned off formula at the same time organic whole milk surpassed $6 a half gallon at her local corner store.
“She wouldn’t want to sleep so she would just ask for more milk and then spit it up and it was so painful, like, ‘No, not my expensive milk!” says Young, a 41-year-old author.
Now, Young relies more on Target’s store brand (where
Young says a gallon is usually around $2 cheaper). The family will often use excursions to Young’s parents’ in Long Island, N.Y., or to their second home in the Berkshires to grocery shop for less.
Young’s husband, Augustin Pasquet, has also made more of an effort to buy local eggs and meat straight from Massachusetts farmers. With grocery prices up so much, he says farm fresh no longer feels like a splurge.
Flight attendant Bahadir Senyurt has taken traveling for groceries to the extreme. While he’s long picked up a few local treats to share with his partner, Scott Cocking, when he returns, he’s more recently taken to filling half of his suitcase with staples he says cost less and taste better abroad.
Recent hauls have included the same rosé wine from Paris for $7 that Trader Joe’s was selling for $17, $2 European dish detergent available on Amazon for $15, as well as bags of espresso, pasta, olive oil and bread.
“I’ll survey the pantry before I head out to see what we’re running low on and stock up while I’m overseas,” says Senyurt, 48.
Shopping sales Roughly two-thirds of the 8,017 Americans consumers surveyed by retail marketing firm Advantage Solutions this past fall said they now lean heavily on in-store coupons before or during their shopping trips, compared with the 33% who said they used them in 2021.
Never one to pay attention to coupons until recently, Augeri in Tampa has turned shopping the sales into a game with her two young daughters.
“We guess how much money Mommy can save,” says Augeri. “The other day I saved $60 and we were, like, screaming.”
In Houston, 34-year-old Ashley McGeary has taken the opposite approach. She threw out her grocery list and is now guided by what’s on sale. McGeary, who works at an energy infrastructure company, says she goes to one of a few local stores almost every other day to take advantage of as many different discounts as possible.
“I’m being more flexible, and I end up eating more seasonally, which I think is healthier,” McGeary says. “It’s a good feeling and a way of still feeling like I got a deal.”