Diet and Weight Reducing Centers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,300 diet and weight reducing centers in the US help individuals attain or maintain a desired weight using non-medical methods. Weight loss services account for the majority of industry sales. Firms may also sell weight reduction products, such as food supplements or prepared food products.
Competition from Alternative Service Providers
Diet and weight reducing centers compete with a range of alternative service providers, including health care providers, fitness centers, pharmaceuticals, self-help programs, and surgical procedures.
High Customer Failure Rate
Most consumers fail to achieve or maintain weight loss through traditional programs.
Industry size & Structure
The average diet or weight reducing company operates out of a single location, employs about 17 workers and generates $1-2 million annually.
- The diet and weight reducing services industry consists of about 1,300 firms that employ about 22,000 workers and generates $1.7 billion annually.
- Franchises account for half of the industry. Franchisees account for 21% of establishments.
- The industry is highly concentrated; the top 50 companies account for 72% of industry revenue.
- Large firms, which include WW (Weight Watchers), Nutrisystem and Jenny Craig (both owned by Wellful), and Medifast, may have international operations.
Industry Forecast
Diet and Weight Reducing Centers Industry Growth
Recent Developments
Mar 22, 2024 - Employment, Wages Up
- Employment by other personal care services, including diet and weight reducing centers, was up slightly in late 2023, while wages grew significantly, according to data from the Bureau of Labor Statistics (BLS). Employment had surpassed pre-pandemic levels by nearly 9% in late 2023. Labor costs have grown 27.5% since pre-pandemic levels, with average hourly wages reaching $26.38 in Q4 2023. Additionally, consumer spending levels showed a slight upward trend in the first nine months of 2023, according to personal consumption expenditures data from the Bureau of Economic Analysis.
- Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
- A new panel conducted by Gallup shows that key physical health metrics have worsened post pandemic, remaining at record and near record high levels for obesity and diabetes. The percentage of US adults classified as obese (above 30 BMI) was 38.4% in 2023, slightly less than the record high of 39.9% set in 2022 but 6 percentage points higher than in 2019. Older adults classified as obese increased in 2023, with the 30 to 44 age category up 6.1 points and the 45 to 64 age category up 8.2% since 2019. Eating habits have worsened since 2019, with the number of adults reporting eating healthy the day prior falling 5 points. The number of respondents who say a medical professional diagnosed them with diabetes reached a new high of 13.6% in 2023, up 1.1 points since 2019. Opportunities increase for diet and weight reducing centers when national obesity levels rise.
- Diet and weight reducing centers will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
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