We’re in the midst of the 2024 Paris Olympics, and there’s nothing as motivating as seeing the world’s most elite athletes at the peak of their performance. Team USA has generated plenty of memes, from Stephen Nedoroscik’s iconic pommel horse routine and Clark Kent-ish doffing of the glasses to Katie Ledecky literally being the only one on screen for the 1,500-meter freestyle final lap. We love celebrating our athletes, and now it’s our turn to see who’s been hitting the gym and how the fitness category has been performing in terms of visits the first half of the year.
Fitness was one of the hardest hit categories during the pandemic due to the largely indoor nature of gyms coupled with inescapable heavy breathing, but lately this category has been going from strength to strength. Traffic was up across the fitness category in the first half of 2024, and there have been many news stories about large gyms taking over large box vacancies, or boutique fitness being added to local centers. Ironically, February had more year-over-year traffic than January. Perhaps it took a while for New Year’s Resolutions to kick in this year.
However, there’s more to the story. We’ve seen the effects of inflation coupled with high interest rates for a few cycles now, thus leading to a value orientation in multiple categories, such as groceries or mass merchandisers. When we previously looked at the fitness category in late 2022, we hypothesized that the category was in a better position to withstand economic volatility due to new approaches to monthly membership fees, a shift to a younger member base, and increased workout frequency. Still, we thought we'd revisit the category with using trade area demographic data.
In terms of the fitness club memberships, do most people consider it an essential or a luxury? The numbers indicate that it’s a little bit of both. Among affordable fitness with a monthly starting price point less than $30, traffic has been up monthly compared to last year. When your gym membership costs less than $1 a day, it’s something that one may want to keep particularly when some boutique classes can cost that much for just one session. However, for the mid-priced fitness clocking in at $30-$60 per month, the bag has been a bit more mixed. Some months were up and some were down. Premium fitness gyms are more than $60 a month and frankly some are in the hundreds per month depending on the city and level of amenities. These saw a spurt in the spring compared to last year, likely as people start getting ready for the summer. Boutique fitness is usually more concentrated on a specific discipline and often is paid with class passes, although subscriptions are sometimes an option. Generally speaking, the classes average $20 or more per class. Pilates, Yoga, Boxing, Martial Arts, Indoor Cycling, and Rowing are among the types of classes you can find with boutiques. These have proven to be driving higher traffic than last year.
Among the affordable fitness chains, EoS Fitness and Crunch Fitness have seen some of the largest gains, compared to last year. The former is on a roll, having hit over one million members last year, with plans for further expansion around the country. The latter is also in its high-growth phase, with over 450 locations and a vision for even more.
Among Mid-Priced Fitness, In-Shape Health Clubs saw increased traffic. Retro Fitness is also seeing some increases in the months leading up to summer. However, some of the other players in this price tier are seeing lower foot traffic compared to the same time last year. The monthly subscription price could very well be competing with other categories that are somewhat in between necessity and luxury, such as streaming services, dining out, or shopping.
Within the premium fitness chains, Movement Gym has seen the largest monthly increases, and The Bay Club is also seeing higher traffic this first half of the year. We’ve previously written about Movement Gym, and one thing that comes through clearly is the sense of community that pervades it. This sense of physical connection is highly sought after as a counterpart to our heavily digital lives. The Bay Club touts its “resort-level amenities," offers kids’ sports and summer camps, and also offers golfing tee times at partner clubs. Life Time is also seeing an early summer pickup over last year’s traffic. Luxury gyms in the premium category are becoming all-in-one third spaces where one can find childcare, cafes, workspaces, and even hotel rooms through partnerships.
Regarding boutique fitness, we have chains that run the gamut. Touchstone Climbing has seen some large increases. Climbing is a great way to build upper body strength but also combines strategy and camaraderie while doing so. Club Pilates, which we wrote about in Placer’s monthly TLDR LinkedIn newsletter, is also seeing gains year-over-year.
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