Why Gyms Are Outperforming Movie Theaters Right Now

To survive in today’s evolving bricks-and-mortar environment, retailers must find ways to differentiate their offerings, according to Mark Sigal, CEO of Datex Property Solutions.

He tells GlobeSt.com that the story on brick-and-mortar retail, while accelerated by COVID, is largely unchanged, but that “undifferentiated retail is dead” because “if a given segment of the market can be digitized, commoditized or de-localized it will be.

“There is a reason why segments such as fast food, restaurants, hair, salons (nail, massage), groceries and specialty retail have proven resilient, whereas more undifferentiated retail categories like dollar stores and pharmacies have proven less durable or less robust.

“What mitigates this is that while lifestyle and experiential retail were the fastest growing segments pre-COVID-19, not all categories are created equal.”

Gyms Offer More Social Settings

Sigal said to consider the distinction between fitness and movie theaters.

“Both deliver inherently social experiences, but whereas both segments faced existential risk when the pandemic hit, fitness has emerged post-pandemic stronger in terms of sales than pre-pandemic, whereas movie theaters are teetering on the edge of obsolescence,” he said.

“Why is this?” he asked rhetorically, “For one, while home fitness systems like Peloton took off during the early stages of the pandemic, and there was reasonable doubt if consumers would once again be comfortable using shared equipment, the larger reality is that the routine of exercise is heavily aided by the discipline of going to a physical gym, coupled by the peer support of working out alongside others, not to mention the social aspect of same.”

Theaters ‘Teetering on Edge of Obsolescence’

By contrast, Sigal said, movie theaters are now competing with the fact that most consumers have really good home theater setups.

Adding to this, the studios have dramatically shortened “release windows” from when movies are available at the movie theater only to when such content is available via cable, satellite and broadband.

“In such an environment, movie theaters find themselves between a needle and a haystack.”

Post-Pandemic has Fed a Yearning for Small & Big Indulgences

That noted, things are hardly zero sum. The post-pandemic period has fed a yearning for social, experiential, health, beauty and plugging back into … life.

“While in theory, the consumer will be more discriminating on where they spend, in practice, consumers remain relatively flush, and we are not seeing the either/or dynamic one expects in a softening economy.”

“Consumers are spending on fitness and sporting goods. They are enjoying eating, traveling, buying new clothing outfits and taking care of their hair and nails. As much as ever, retail therapy nurtures the soul.”