Gyms and Spas Outnumber Retail Stores in America as Wellness Market Booms
In a landmark shift for the American retail landscape, service-oriented businesses such as fitness centers, medical spas, and specialty salons have now surpassed goods-based retailers in leasing activity for the first time on record. According to data from CoStar reviewed by The Wall Street Journal, service-based tenants leased more than 50 percent of total retail square footage in 2025, a significant increase from the 40 percent share they held just 15 years ago. This transformation reflects a fundamental change in how consumers signal their social standing and allocate their disposable income.
The Rise of the Wellness Economy
The United States boasts the world's largest wellness market, which reached a staggering $2.1 trillion in 2024, as reported by the nonprofit Global Wellness Institute in January. New research indicates that each of the top 25 countries in wellness have exceeded their pre-pandemic market sizes. The U.S. alone accounts for a remarkable one-third (32 percent) of the global wellness economy, growing by over $130 billion between 2023 and 2024—a gain roughly equivalent to the entire wellness markets of Italy and Australia combined.
Brandon Svec, national director of U.S. retail analytics for CoStar, explained to The Wall Street Journal that consumer preferences have evolved dramatically. "A handbag used to be the luxury symbol," he noted, "but today's consumers prefer to spend that capital on yoga classes or high-end facials." This shift underscores a broader trend where experiences and personal well-being are prioritized over material goods.
Transforming Retail Spaces
The surge in e-commerce has fundamentally altered the physical requirements for traditional retailers. With online sales accounting for 16.4 percent of all retail activity last year, many clothing and office supply stores are downsizing their physical footprints. Property owners are capitalizing on this trend by subdividing large, vacated spaces into smaller, more lucrative units.
Brian Finnegan, CEO of Brixmor, highlighted a specific example to The Wall Street Journal: his firm subdivided a 10,200-square-foot former liquor store in Philadelphia into four smaller units—an animal hospital, a facial spa, a stretching studio, and a nail salon. These four tenants now generate 20 percent more rent than the previous occupant, demonstrating the profitability of this adaptive reuse strategy.
Fitness as a Social Outlet
Beyond mere exercise, fitness centers are increasingly serving as primary social venues. Noah Neiman, co-founder of the boxing chain Rumble, recently launched a new self-defense and group-fitness concept called the Pack. He told The Wall Street Journal that spaces like gyms are becoming "the new happy hour," where people meet friends or bond with colleagues through physical activity rather than alcohol. This social dimension further fuels the demand for wellness-oriented retail spaces.
Despite these changes, U.S. retail vacancy rates remain remarkably low at 4.4 percent, only a slight increase from the 2024 record-low of 4.1 percent. This stability suggests that the transition from goods-based to service-based retail is being managed effectively, with new tenants quickly filling vacancies left by traditional stores.
The data clearly indicates that America's retail environment is undergoing a profound transformation. As consumers continue to invest in health and wellness experiences, gyms, spas, and salons are not just surviving but thriving, reshaping urban and suburban landscapes across the nation.
