According to the Sporting Goods Manufacturers Association (SGMA), sales of fitness equipment in 2008 declined for the first time in 20 years. Their survey found that treadmills are still the best selling fitness machine. $870 million of treadmills were sold in 2008, followed by elliptical machines at $687 million. According to SGMA spokesperson Mike May, "I don't think [treadmills are] going to lose that spot any time soon."

According to SGMA, the size of the fitness industry was $4.2 billion in 2008, down from $4.7 billion in 2007. They calculated that over fifty million Americans used a treadmill in 2007, about 15% of the population! SGMA President Tom Cove said that "the fitness industry was not immune to the side effects of the tough economy, but because people are aware of the importance of a regular physical fitness regimen, we expect the fitness industry to regain strength as the economy heals and home starts improve." The fitness industry is defined as comprising gear and equipment sold for use in the home, clubs, and institutions, such as schools, colleges, hospitals, and hotels. 2007 industry sales were up from $4.2 billion in 2004 and $3.9 billion in 2000. The 2008 decline was blamed on a slowdown in housing starts and the overall economy. Membership in health clubs was also down slightly in 2008. According to the International Health & Racquet Sports Association, 45.4 million people were members of health clubs in the U.S. in 2008.


The Home Alternative
The SGMA reports that the home fitness market is now roughly three times as big as the institutional market. That may explain why Cove of the SGMA links the growth of the fitness industry to housing starts. The SGMA's online survey of 41,500 households found that more than 60% of Americans exercise regularly. Walking, treadmills, hand weights, running, and resistance machines were the top five fitness activities. According to Robert Braun, Vice President of Sales for Treadmill-World.com, a leading online retailer of treadmills, the quality of home equipment has increased so much over the past few years that people can work out quite well at home for less than the price of an annual gym membership.

Colleen Logan of ICON Health &Fitness, the world's largest manufacturer of fitness equipment, says that while sales to health clubs and specialty stores may have dropped substantially, the home fitness market is not down as much, as consumer habits change with the times. She explained that "People are saying, "Do I really need that gym fee?" They are choosing not to spend $3,000 to 4,000 on a treadmill, but we're seeing steady sales of treadmills for under $1,000."


The Online Alternative
Comscore.com reports that e-commerce sales of all categories of goods remained flat in the first quarter of 2009, and improvement over the year-over-year 3% loss for the fourth quarter of 2008. However, the fastest-growing category in first quarter of 2009 was Sport & Fitness, which continues to grow, as consumers have been willing to buy treadmills and stationary bikes online.

Braun of Treadmill-World says that people are saving even more money by buying online. "Usually there is no sales tax and no shipping charge when you buy online, so, if you know what you want, you can get some great deals." he said. About his company's sales trends, he said "The business is very seasonal. Our biggest months are December and January, when people buy gifts and it's often too cold to exercise outdoors. Last winter was out best season ever. 2009 is looking good too. We can lower our prices fairly easily if we have to. Companies with the fixed overhead of physical stores have a tough time doing that."

Other industries are also experiencing deflationary pressures and expecting substantial price cuts for the holiday season. However, a survey of seventy retailers released October 22, 2009 by the National Retail Federation's Shop.org and BIGresearch found that even though the retailers expect online growth to slow this holiday season, it will still fare better than the rest of retail. Nearly 45% of respondents projected holiday sales would grow at least 15% over last year's.


Company News
Dick's Sporting Goods, a major retailer of treadmills with 400 stores in 40 states, announced in March 2009 that it sales were weak in 2008, with the biggest declines in the bigger ticket discretionary purchases, such as golf and exercise equipment.

Sales at were down 33 percent in the second quarter of 2009 for the fitness division of Brunswick Corp., Their fitness division manufactures Life Fitness treadmills and Hammer Strength fitness equipment. The company said commercial equipment sales, which account for the largest percentage of division sales, declined in the quarter as fitness club operators remained cautious about ordering equipment. Sales of consumer exercise equipment also were down, although at lower rates than sales of commercial equipment.

At the Finnish parent of Precor USA, the U.S. manufacturer of premium treadmills used mostly in fitness clubs, fitness division sales for the first six months of 2009 were down 15% from the first six months of 2008.

In August 2009, Nautilus, Inc. announced a second-quarter loss of $21 million and said it would shift its emphasis from its commercial exercise equipment to its retail and direct consumer business, where it sees better opportunities. Its consumer brands include Bowflex, Nautilus, and Schwinn While its consumer business has been profitable, its commercial business has been losing money. In September, Nautilus said it would try to sell its commercial business, including its StairMaster brand, related stepper lines, and commercial indoor cycling line.

Cybex International, a major manufacturer of exercise equipment for health clubs, is raised money for breast cancer research for National Breast Cancer Awareness month this October through an innovative program. If fitness club owners bought their pink treadmills, Cybex donated 10 cents for every mile logged on them during the month. Cybex sales declined 25% for the first nine months of 2009 from the same period in 2008.


Shakeout Coming?
There are currently over forty brands of treadmills for sale in the U.S. market. These brands offer hundreds of models. Given the depth of the economic slump, the declining fortunes of U.S. manufacturing, and the nature of treadmills as discretionary purchases, are we due for a shakeout? See the next issue of State of the Treadmill Industry to learn the latest.