The fitness foot traffic recovery may be underway, but that doesn’t mean that gym-goers are returning to their pre-COVID patterns. Consumer preferences have shifted over the past couple of years and are driving major changes in many established retail categories, including the fitness space. Here, we take a look at how LA Fitness, a pre-pandemic category leader, is adapting its offering to today’s consumers through its new value-priced chain, Esporta Fitness.
Fitness Demand Strengthened By Pandemic
In a survey we conducted in March 2022 of U.S. based adults aged 18 to 64, almost half (47.7%) of all respondents stated that they had taken up exercise or increased their exercise levels since the start of the pandemic. This means that consumer demand for fitness is strong and growing.
The potential of fitness brands to thrive in the new normal is well illustrated by the rise of Esporta Fitness. Fitness International, the same company that operates LA Fitness and City Sports Clubs, launched the value-priced fitness concept shortly before the pandemic by rebranding a number of LA Fitness locations as Esporta. Since then, Esporta has grown rapidly both by opening new locations and by taking over gyms that were previously operating under the LA Fitness brand.
Low-Cost Fitness Chains Positioned to Thrive
Given the fact that the vast majority of Esporta locations were opened in 2020 or later, comparing Esporta and LA Fitness’ performance is challenging as there is no pre-pandemic benchmark that can be used to judge Esporta’s current performance. Still, comparing the change in visits per venue between July ‘21 and February ‘22 for Esporta and LA Fitness shows that Esporta is consistently outperforming the legacy fitness brand in terms of its visits/venue growth.
This means that Esporta foot traffic is not just growing in absolute numbers due to the rapid expansion of the chain – Esporta’s existing venues are also seeing a swift COVID recovery when compared to LA Fitness locales.
One of the key elements to Esporta’s success is its affordability. Our data shows that Esporta Fitness visitors have a median household income of $53K per year – $15K per year less than the median household income for LA Fitness visitors.
Esporta’s success as a low-cost fitness option is consistent with the trend of thriving low-cost fitness chains in the new normal, which has several explanations. First, the pandemic has led to a significant increase in consumers prioritizing health and wellness, and first-time gym goers appear to be showing a preference for an affordable gym before considering committing to a high cost membership.
Second, lower-income populations have also increased their exercise levels over the pandemic. According to our survey, over a third (35.6%) of respondents with a household yearly income of less than $25,000 report exercising more since the outbreak of COVID. As lower-income populations are less likely to have well-equipped home gyms, fitness centers that can offer value-priced memberships will meet a ready demand.
Third, the pandemic seems to have accelerated the move towards hybrid fitness. According to this model, consumers get their fitness fix through a variety of channels, including independent home workouts, online and in-person classes, and gym sessions. Consumers who have adopted the hybrid model and are paying for access to several different fitness platforms may want to keep their gym membership costs low, as gym fees are just one portion of their overall fitness spend.
Diving into Select Esporta Locations
Many of the current Esporta locations took over gyms previously operated by LA Fitness. Comparing consumer behavior before and after the rebrand can help us see how the shift away from LA Fitness and towards Esporta is serving customers’ current fitness needs.
The chart below zooms into five gyms across the country that were operated by LA Fitness in between July 2019 and December 2019, and that were rebranded as Esporta by July 2021. An analysis of consumer behavior shifts for the five locations shows an increase in the True Trade Area – as measured by the distance in miles that is required for 70% visitors to reach the property – for all five locations with the change from LA Fitness to Esporta. Meanwhile, customer loyalty – as measured by the share of unique visitors who visited at least 12 times between July and December 2019 and 2021 – decreased across the board.
One potential conclusion is that the increase in trade area coupled with the decrease in loyalty indicates that many of Esporta’s visitors are indeed engaged in hybrid fitness routines. These visitors may frequent the gym less often, since working out at the gym is just one component of their exercise regimen. And since their gym visits are not as frequent, these consumers don’t mind traveling a little farther to a gym that offers a more affordable membership. This frees up some of their fitness budget that can then be used to purchase fitness products or content from other fitness-related channels.
A more optimistic view would posit that the push to value drove a much wider reach – and as the wider COVID situation continues to normalize, so will visit rates. If the former proves true, the Esporta shift may prove to be incredibly valuable. However, if it is the latter, the growing market opportunity in value fitness may have found a new leading player. Whatever mix of factors may be driving these changes, there is a unique opportunity for Esporta’s role in the sector to expand quickly in the near future.
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