National gym chain Planet Fitness is hiking the cost of its basic membership for the first time in 26 years.
A no-frills membership for new customers will cost $15 per month, up from the $10 it had been priced at since 1998. The price hike will go into effect this summer. Current members, who joined at $10 per month, will continue to pay that amount until the membership expires, the fitness company said in its first quarter earnings call Thursday.
The company is only raising the price of its lowest tier or "classic" membership that lets members use a single gym location.
"It will take some time for the benefit of the price change to expand our store level margins as the price increase will only be on new classic card memberships," PlanetFitness CFO Tom Fitzgerald, who is retiring in August, said on the earnings call.
The membership price hike comes amid "several headwinds" affecting the company's results. Executives acknowledged consumers' focus on saving money, COVID-related concerns, as well as a failed advertising campaign.
For an unchanged fee of $25 a month, Planet Fitness "Black Club" members can work out at multiple facilities; more than 60% of the company's members join at the "Black Card" tier.
The 50% price hike comes after price-testing costs in multiple markets. "We use a disciplined data-driven approach to determine the best balance between the higher dues while minimizing loss of membership. Based on our learnings, we decided to change the price of the classic card to $15," PlanetFitness CEO Craig Benson said on the earnings call.
The company will also conduct similar price tests for the Black Card membership.
At the other end of the spectrum, luxury fitness chain Equinox this week launched an ultra premium program for fitness-obsessed members costing no less than $40,000 a year.
Megan CerulloMegan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.