The “K-Shaped” Economy Flexes Its Muscles: What Gym Trends Reveal About Consumer Spending
Strong growth was reported by both Life Time Group Holdings and Planet Fitness, but a closer look reveals diverging paths for American consumers. The latest earnings reports from these two gym giants highlight a widening gap between those who can freely spend and those who are becoming increasingly price-sensitive.
Life Time: Wellness as a Priority for the Affluent
Life Time’s revenue jumped 12.3% in the fourth quarter to $745.1 million, fueled by higher-income members willing to pay more for premium services. The company increased membership dues by roughly $10 to $30 annually without impacting demand. This suggests affluent consumers continue to prioritize health and wellness, even amidst broader economic uncertainties.
Beyond membership fees, Life Time is seeing increased spending on in-center amenities like personal training, spa treatments, and food and beverage options. In-center revenue topped $191 million in the fourth quarter, demonstrating a shift towards viewing these clubs as lifestyle destinations. Average revenue per center membership rose 10.8% to $882.
According to Mizuho analyst John Baumgartner, Life Time’s model is resilient, with “downside risks limited by a membership skew favoring high-income households and differentiated club activities.”
Planet Fitness: Growth with a Side of Caution
Planet Fitness also experienced growth, adding 1.1 million members in 2025. However, its 2026 outlook raised concerns. The company projects revenue growth of 9% and same-store sales between 4% and 5%, falling short of Wall Street expectations.
CFO Jay Stasz attributed some of the slowdown to weather-related disruptions in January and a slightly higher cancellation rate. However, the guidance suggests a potential limit to how much even value-conscious consumers can continue to spend on discretionary items.
Planet Fitness is testing price increases and investing in new amenities like red light therapy and additional classes to attract younger members and boost revenue per member. Stifel analyst Chris Cull noted a “credibility hurdle” for the company, questioning whether its long-term targets are realistic.
The Broader Economic Divide
The contrasting performances of Life Time and Planet Fitness mirror a “K-shaped” economic recovery, where higher-income households continue to thrive even as lower- and middle-income groups face increasing financial strain. This trend isn’t isolated to the fitness industry.
Similar patterns are emerging across various sectors. Airlines are expanding luxury offerings to cater to affluent travelers, while fast-food chains are emphasizing value meals to attract price-sensitive customers. This reinforces the idea of a bifurcated consumer base.
What Does This Signify for Businesses?
The diverging trends suggest businesses need to understand their target audience and tailor their offerings accordingly. For companies catering to higher-income consumers, premium experiences and personalized services remain attractive. For those targeting price-sensitive customers, value and affordability are paramount.
Planet Fitness’ performance in the coming quarters will be a key indicator of the financial health of lower- and middle-income consumers. William Blair analyst Sharon Zackfia lowered her firm’s projections for Planet Fitness’ 2026 member growth to 800,000 from 1 million, but remains optimistic about the brand’s long-term outlook.
Frequently Asked Questions
Q: What is a “K-shaped” economy?
A: A K-shaped economy describes a situation where different segments of the population experience vastly different economic outcomes, creating a widening gap between the wealthy and those struggling financially.
Q: How are gyms reflecting this economic trend?
A: Life Time is thriving with affluent members spending on premium services, while Planet Fitness is facing headwinds as price-sensitive customers become more cautious.
Q: What should businesses do to adapt to this trend?
A: Businesses should understand their target audience and tailor their offerings to meet their specific needs and financial capabilities.
Q: Is this trend expected to continue?
A: The current data suggests the divide is likely to persist, making it crucial for businesses to adapt their strategies accordingly.
Did you know? The fitness industry often serves as a bellwether for consumer spending, as gym memberships are often one of the first expenses cut during economic downturns.
Pro Tip: Businesses should consider offering a range of price points and service levels to cater to a diverse customer base.
What are your thoughts on the “K-shaped” economy? Share your insights in the comments below!
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