Steve Schneider, CEO of ZAP, sees a very good future for alternative energy vehicles. “Every morning that I pick up a mainstream newspaper I read another article which addresses the national and personal economic consequence of $3-a-gallon gasoline. Today Forbes and the Wall Street Journal have presented an excellent composite view of the overall impact this is having on our economy. These issues are real and they are here to stay. People are cutting back because of the price of gasoline. They are NOT buying the pickup trucks and the SUV’s. They are looking at alternatives and we are the best alternative out there.”
The article on the front page of the Wall Street Journal noted that in recent weeks companies were directly impacted by consumer spending which has shifted from goods and services to gasoline. “Starbucks, Whole Foods and Williams-Sonoma — along with others such as boat maker Brunswick Corp. and specialty-sandwich chain Panera Bread Co. — have reported disappointing sales that sent their share prices lower. Restaurants catering to middle-income consumers are seeing a sales slump too,” noted the Wall Street Journal.Schneider notes, “If you look at Wal-Mart Stores, Inc. president and CEO, Lee Scott’s recent statement, even they are impacted. He said, and let me read it, and I am quoting him: ‘Some of the same issues affecting our customers – higher utility costs and gas prices – are impacting many corporations, including Wal-Mart. We find it encouraging that we continue to grow market share in food and consumables during this time.’ ” This whole idea of looking for alternative energy vehicles is right for right now.
The Wall Street Journal Article continues to point to the consequence of higher fuel costs. Ms. Liebmann president of consulting firm WSL Strategic Retail in New York, says that households earning as much as $75,000 a year are changing their habits. Survey responses among this group were more similar to those of low-income households than those of wealthy families, she says. The types of spending most likely to be chopped: fashion accessories, clothing, home decor, electronics and entertainment.
How deep the trend extends, and how long it will last, are being closely watched by economists and retailers. Three-fourths of U.S. economic growth last year stemmed from increased consumer spending. Lower-income shoppers, more vulnerable to high fuel prices, already had been spending less in some areas, as seen by slowing sales at Wal-Mart Stores Inc. and similar chains.
For companies targeting the middle-income group, the spending slowdown could force a shift in strategies — and expectations. After its fiscal third-quarter sales fell short of Wall Street forecasts, Whole Foods said it may lower prices on nonperishable items and branded organic and natural products to better compete with other grocery stores.
Similarly, many of the more upscale casual-dining spots, including P.F. Chang’s China Bistro Inc., Applebee’s International Inc. and Cheesecake Factory Inc., have been warning investors of slowing sales. In a conference call last month, P.F. Chang’s president, Robert Vivian, said diners who were treating themselves to a splurge in boom times are pulling back. Executives at P.F. Chang’s say the casual-dining industry is in its biggest slump since 1991, when it was hurt by the Gulf War and the beginning of a recession.
“You do have to go back over 15 years to find an environment where the consumer has responded like they are today,” Chairman and Chief Executive Rick Federico said during a conference call July 26. “We have lowered our expectations for the back half of the year to better reflect current trends in our business.”
Boat maker Brunswick is making fewer of its lower-priced boats in response to the slowdown.
King’s Jewelry & Loan, a pawnbroker with three locations in the Los Angeles area, sees the trend playing out in increased demand for loans. Borrowers at King’s tend to be solidly middle class, earning $40,000 to $70,000 a year, according to President Sam Shocket.
The National Association of Home Builders said its index of builder sentiment plunged to its lowest level since 1991. That makes it tougher for homeowners to use their house as a source of cash.
Steve Schneider notes, “Driving an alternative energy vehicle has never made more sense than it makes right now and I truly believe ZAP is in the driver’s seat.”
Source: Justin Lahart and Amy Merrick
The Wall Street Journal
ZAP (NYSE Arca: ZP)
501 4th St.
Santa Rosa, CA 95401
Phone: 707-525-8658
Fax: 707-525-8692
Forward Looking Statements Statements in this press release that relate to future plans or projected results of ZAP are ‘forward-looking statements’ within the meaning of Section 27A of the Securities Act of 1933, as amended by the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), and Section 21E of the Securities Exchange Act of 1934, as amended by the PSLRA, and all such statements fall under the ’safe harbor’ provisions of the PSLRA. ZAP’s actual results may vary materially from those described in any ‘forward-looking statement’ due to, among other possible reasons, the continued acceptance of ZAP’s products, increased levels of competition, new products and technological changes, ZAP’s dependence on third-party suppliers, intellectual property rights, and the realization of any of the other risks described in ZAP’s Annual Report on Form 10-KSB, or in any of ZAP’s other filings with the Securities and Exchange Commission. Readers of this press release are cautioned not to put undue reliance on forward looking statements.
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