The Playbook: As Consumer Spending Teeters, Fitness Touts Resiliency

The fitness and wellness sector has shown impressive resilience when economic uncertainty hits. Planet Fitness offers the perfect case study on navigating tough times

This story is part of “The Playbook,” a weekly column that takes a deep dive into the future of business, management and technology, with an eye toward practical applications for fitness and wellness executives

Retail sales slowed in June as consumers grappled with concerns about the economy and government policies, according to the latest CNBC/NRF Retail Monitor, powered by Affinity Solutions. The results cast a shadow on consumer spending in the second half of this year.

The report, released by the National Retail Federation (NRF), highlighted a shift in consumer behavior, marking the first monthly decline in retail spending since February.
The drop comes amid ongoing anxiety over tariffs, trade policies and broader economic uncertainties. NRF President and CEO Matthew Shay attributed the trend to mounting concerns about the economy, noting that unresolved trade policies are acting as a “significant headwind” despite some supportive government measures.


“June’s numbers indicate that prolonged uncertainty surrounding the economy, tariffs and trade policy could be pushing consumers to adopt a ‘wait-and-see’ approach with their household budgets,” Shay said. “While economic fundamentals haven’t been disrupted yet and shoppers still have the ability to spend on priorities, the economy is gradually slowing, and we’re seeing an impact on consumer confidence.”

By the Numbers: June Sales

Retail sales excluding automobiles and gasoline fell 0.33 percent month-over-month on a seasonally adjusted basis, though they rose 3.19 percent year-over-year in June. Comparatively, May saw healthier increases of 0.49 percent month-over-month and 4.44 percent year-over-year.

Core retail sales — which exclude restaurants, automobile dealers and gasoline stations — fell 0.32 percent month-over-month in June but posted a 3.36 percent year-over-year gain.

For the first six months of the year, total sales rose 4.66 percent, while core sales grew 4.93 percent, offering a broader perspective on consumer spending during 2023.

The data underscores a growing caution among consumers, who appear to be pulling back on discretionary spending amid heightened economic uncertainties. While certain sectors, such as digital products and sporting goods, are thriving year over year, other categories — especially furniture and building supplies — highlight a broader hesitance to make significant purchases.

This sentiment reflects broader trends in household budgeting as consumers navigate inflation pressures, rising interest rates and unclear trade policies. Shay expressed hope that the passage of the “Big Beautiful Bill,” aimed at boosting economic growth, could provide a counterbalance to the restrictive trade policies currently weighing on consumer confidence.

As retailers look ahead, the June slowdown raises questions about whether consumers will resume stronger levels of spending in the coming months or whether economic uncertainties will continue to weigh on the retail sector. Shoppers remain capable of spending, but as the economy cools, The Playbook move here is that retailers may need to adjust strategies to address evolving consumer priorities.

Fitness Flexes in Tough Times

Are there any safe havens in this challenging retail environment? There sure are. Looking back at the COVID pandemic and through to the post-pandemic period now, fitness and wellness are resilient when times get tough.

Take Planet Fitness, for example. The fitness franchise giant emerged from the pandemic and thrived in the post-COVID period by understanding their core user and their needs, and also having a keen and opportunistic eye on the retail real estate market. The gym brand is leaning into its “Judgement Free Zone” marketing and affordable membership options to drive revenue and profits.

And it is working. Revenue went from $534 million in 2021 to $1.2 billion now, while the net margin rate jumped from 8 percent to 15.9 percent. But the numbers only tell part of the story. Planet Fitness’ secret sauce is how the brand connects and engages its members.

Last May, during a Q&A with analysts at a Raymond James & Associates retail conference, Planet Fitness CEO Colleen Keating said the company has been successful because it continues to reinvent itself and evolve. More importantly, it is a brand where people, especially younger generational cohorts, are now going to begin their fitness journey.

“This generation today (Gen Z) has seen their parents with a gym membership or grown up with a treadmill in the house,” Keating told investors. “Fitness is more about their lifestyle, perhaps than for generations before.”

The CEO said consumers who have never been in a gym or club before often feel “gymtimidated.” They fear not knowing how to use the equipment and don’t know where or how to start.

“Our welcoming, judgment-free environment, I think answers that call,’ Keating said, adding that the company’s brand promise of “growing stronger, together” also conveys that Planet Fitness is a fitness community where getting  stronger together “speaks to that sense of community.”

Real Estate Opportunities Are There, if You Know Where To Look

The other key Playbook move is navigating a tough retail real estate market where vacancy rates hover in the mid-single digits. In response, Keating has bolstered the real estate team, which is working closely with franchisees. The CEO said recent retail bankruptcies and store closures may open things up, and get the brand back on track to opening about 200 units a year.

“If I’m a landlord or I’m a developer and I’m thinking about a prospective tenant for space that’s coming online and I’ve just had a retail bankruptcy, we need to be telling the story of the strength of Planet Fitness as a tenant and helping marry those space opportunities with our franchisees who have development opportunities in the geography,” Keating said.

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