Gyms used to be dark, rather smelly places full of big intimidating dumbbells and ominous-looking racks of various sorts, and also big intimidating guys with bulging muscles. These days, they’re more likely to be light and airy and filled with healthy but not ridiculously pumped-up patrons.
This may be good for moderate exercisers but it’s not great for the gym business. Planet Fitness and LA Fitness are among the national chains that have seen better days.
Planet Fitness made its way into the world by promoting its “Judgement Free Zone,” which outlawed leering at fellow gym rats. It targeted beginners and soon grew to 2,900 locations nationwide.
But the company is facing what it has described as “internal and external headwinds.” In its most recent earnings report, it conceded a “slower-than-expected start from a net member growth perspective.” Slower growth, in other words.
And then there’s LA Fitness, which has been closing locations lately, sometimes bringing them back under the Club Studio name, a more upscale version with correspondingly higher fees. The chain has also fallen under the gaze of the Federal Trade Commission, which has been looking into its membership cancellation process.
At surviving LA Fitness centers, members say there have been cutbacks in club programs, including cycling classes.
Muscle fatigue? Or GLP-1?
So what’s going on with the gym business anyway?
The cynical answer to why anyone would open a gym is that most people take out a membership but seldom show up, thus keeping expenses to a minimum and not wearing out the equipment. So maybe everyone is just staying home and taking GLP-1 to lose those extra pounds?
Experts say no. Analysts who follow the business say that, as in other fields of endeavor, the mid-range gyms are hurting while the low-end and high-end clubs are doing well.
The Health & Fitness Association says that gyms charging $50 or less per month and emphasizing strength training are doing well and seeing strong membership growth while boutique gyms and spas that include pickleball, restaurants, Pilates, pools and other luxuries are enjoying increasing revenue even when membership growth is slower.
This is true of many businesses. The guy selling huge SUVs makes more money per unit while the poor sod vending 1.5-liter econoboxes sells more cars but makes a lot less on each one.
It may also say something about the economy: people who make less money (students, lower-paid employees, retired folks) may have more time to go to the gym. Ditto the higher-flying entrepreneurs (and their significant others) who have more money and more control over their time. Those in the middle are often working longer and harder to try to stay there — in the middle. No gym time for them.
Returning to the GLP-1 issue, it appears that it is indeed part of this trend but not in the somewhat facile way I suggested earlier. There’s actually no documented evidence that consumers are ditching the gym because they’re losing weight via injections.
Rather, there’s some consumer research that suggests the opposite: GLP-1 users are shifting their entire focus towards health and fitness — through medication and also through walking, diet and strength training.
What that could mean is that the conventional $70 a month middle-market health club is losing muscle mass while clubs at both ends of the spectrum are continuing to pack on the revenue.
Of course, as every fitness article must say at the close, be sure to check with your physician before starting an exercise — or GLP-1 — program. Check with your accountant before joining a boutique spa.
The real difference between men’s and women’s sports 😅