Jan 9, 2009

Lifestyle - Pinched Americans stay on treadmill, but seek deals

NEW YORK (Reuters) – Americans squeezed by the economic crisis are still forking out money for gym memberships and dieting centers but health clubs are having to hold down their fees to keep customers coming in.

The Equinox Fitness chain of upscale health clubs on the east and west U.S. coasts saw a 13 percent year-on-year jump in those working out the first Monday of the new year, and analysts at Stifel Nicolaus estimated that overall health club memberships would rise more than 4 percent this year.

"That is a reflection on how (people) have a desire to, in this stressful environment, live a healthy, balanced life," Equinox Chief Executive Harvey Spevak said, adding that members had cut spending on luxurious spa treatments.

But Spevak noted Equinox experienced what he called a "softening" in new health club memberships since the autumn and froze its rates for 2009, holding prices steady for the first time in its 18-year history.

Many people are taking advantage of special deals. Jason Mareydt, who joined the New York Health & Racquet Club upon moving to New York from Detroit late last year, which offered a no-commitment, no joining-fee promotion.

Mareydt, on his way into the club for a free weights workout, said that and the discount he receives through his employer clinched the deal.

Still it is a tough environment for some health-club operators. Bally Total Fitness Holding Corp filed for Chapter 11 bankruptcy in December for the second time in 17 months.

At a time of recession and rising unemployment, there is a growing focus on low-cost options.

Yoga to the People in Manhattan has been packed recently, said one instructor. It has an open class policy, meaning no one has to make a long-term financial commitment, and suggests a donation of $10 a class, roughly half what others charge.

Daniel Devenport, a 27-year old street performer who works out at the 14th Street YMCA in Manhattan, said he had already adopted a low-cost, "minimalist" lifestyle but won't give up the gym. "It is a place to meet new people," he said.


Growth in the diet business is slowing as consumers try to find ways around high prices for plans that include pre-packaged meals.

Grace White, a 46-year old registered nurse in Maryland who joined Weight Watchers last June pays a $40 a month membership fee. She says that cost is worth it for the moral support she gets from weekly group meetings.

She is trying to lower her costs by buying more regular grocery items than prepared meals sold by the diet company. "It is more economical," she said.

Companies that sell meals as part of their plans include Nestle-owned Jenny Craig, NutriSystem Inc and Weight Watchers. The latter says its program is designed to allow dieters to have a choice.

Industry analysts at Barclay's Capital project 3.3 percent revenue growth for U.S. "healthy lifestyle" companies in 2009, down from 8.6 percent growth last year.

Mike Connor, who lives in Lewiston, Maine, said he pays $16.95 a month to have online access to Weight Watchers. He and his wife, who is also in the program, opted not to pay more to attend group meetings but they do sometimes splurge on prepared meals, saying it can save time.

Weight Watchers declined to say if there had been any significant shift in business volume since the new year. However, it conceded that cost was on customers' minds.

"Consumers clearly are being more discerning and selective in how they spend their disposable income," Weight Watchers CEO David Kirchhoff said in an e-mail.

(Editing by Daniel Trotta and David Storey)

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