Inside the holiday season fitness fight

The fitness industry appears headed for a strong holiday season, but not everyone will see a boost.

The category has been on a rollercoaster for more than two years, with the Covid pandemic shifting workout routines and minting new sector winners. Now inflationary pressures and a post-lockdown reset look poised to benefit traditional gyms and trade-down options — threatening connected at-home fitness equipment like the products made by Peloton and Lululemon-owned Mirror.

Inflation remains a top concern for consumers, though October data showed slight easing. Holiday spending projections show that rising costs may result in more muted gift-giving this year.

Demand appears to be stronger for experiences rather than things. The fitness category has a history of surviving pricing pressures, and it usually enjoys a bump from New Year’s resolutions.

“In ’08 and ’09 fitness industry revenues and membership actually ticked up versus much of retail,” Jefferies analyst Corey Tarlowe told CNBC, referring to the financial crisis and recession of that era.

Tarlowe, who covers Planet Fitness and Lululemon, said fitness spending remains steady, even among lower-income, inflation-squeezed consumers. But he sees gyms winning out over more expensive, at-home equipment. People are trading down and shifting more toward value, he said, “and that bodes well for Planet Fitness.”

Planet Fitness posted record membership and expanded its full-year guidance when it reported third-quarter earnings Nov. 8. The company said it had 16.6 million members at the end of the quarter, an all-time high – even compared to the pre-pandemic era – and said it added 29 new locations during the period.

Planet Fitness CEO Chris Rondeau said members are exercising more, too: six times a month versus five times a month when Planet Fitness went public in 2015. The company also reported a decline in its cancellation rate.

Rondeau said engagement for all age groups is near or above pre-pandemic levels. The company, known for its affordable memberships compared to more luxurious gyms like Life Time and Equinox, boasted strong customer acquisitions through its discounted offerings.

Luxury gyms are seeing positive trends, too. Life Time on Nov. 9 reported a 9% increase in members from 2021, and 4,000 additional members compared with the prior quarter.

The cadence of additions is slower than from 2020 to 2021, but the luxury fitness brand continues to lure its higher-income customer base with in-person experiences such as the increasing popular sport pickleball.

Lululemon in September showed strong demand for athleticwear from its higher-income consumer base. The company said it was “not seeing any meaningful…