Spas and gyms now outnumber grocery stores in America

Gyms have pushed and surpassed the competition when it comes to filling American street corners.

Service-based businesses have now surpassed goods-based retailers in leasing activity for the first time on record. This change is fueled by the proliferation of fitness centers, medical spas and specialty salons. According to CoStar data seen The Wall Street JournalService-based tenants leased more than 50 percent of all retail square footage by 2025—a significant jump from the 40 percent share they had just 15 years ago.

The shift represents a fundamental shift in how consumers perceive their social standing.

said Brandon Swick, national director of U.S. retail analytics for CoStar The Wall Street Journal That “a handbag used to be a symbol of luxury,” but today’s consumer prefers to spend that investment on yoga classes or high-end facials.

In the United States, the wellness market is expected to reach $2.1 trillion by 2024, the nonprofit Global Health Institute reported in January. New research shows that each of the top 25 countries in health has surpassed their pre-pandemic market size, according to the report.

“The United States, which accounts for one-third (32 percent) of the global health economy, is a good example,” the World Health Institute report said. “It’s set to grow to more than $130 billion between 2023 and 2024 alone — an achievement roughly the size of the entire healthcare markets of Italy and Australia.”

The growth of e-commerce has fundamentally changed the physical requirements for traditional retailers. With online sales accounting for 16.4 percent of all retail activity last year, apparel and office supply stores are frequently reducing their physical footprint.

Property owners are finding that subdividing these large, vacant lots can be very profitable.

Brixmore CEO Brian Finnegan said The Wall Street Journal For one specific example, his company divided a 10,200-square-foot former liquor store in Philadelphia into four smaller units: an animal hospital, a facial spa, a stitching studio and a nail salon. These four tenants together generate 20 percent more rent than the previous occupant.

Fitness has also become a primary social space.

Noah Neiman, co-founder of the Rumble boxing chain, recently launched a new self-defense and group fitness concept called The Pack. Nimman said The Wall Street Journal Places like gyms are becoming the “new happy hour” where people connect with friends or colleagues through activity rather than alcohol.

U.S. retail vacancy remains remarkably low at 4.4 percent, just a slight increase from the 2024 record of 4.1 percent.