Weight Watchers is losing race against fitness trackers

By Antonia Massa
Updated February 27 2015 - 4:08pm, first published 2:09pm
Consumers have started paying more attention to how active they are and how many calories they're burning, rather than focus on dieting programs and food products.
Consumers have started paying more attention to how active they are and how many calories they're burning, rather than focus on dieting programs and food products.
Fitness trackers have surged in popularity.
Fitness trackers have surged in popularity.

Weight Watchers is losing the race for customers against fitness gadgets.

Revenue fell 10 per cent to $US327.8 million ($421 million) in the December quarter, Weight Watchers International said in a statement Thursday, declining for the eighth straight period as FitBit, Jawbone and other activity trackers lure dieters away.

Shares in the company, a pioneer in the weight-loss industry, slumped as much as 16 per cent in extended trading after the results, on top of a 78 per cent decline in the past three years.

Weight Watchers, founded in 1961, has built up an ecosystem of dieting programs, food products and support centers for people seeking to slim down.

But with consumers paying more attention to how many calories they're burning from exercise or everyday activities, fitness gadgets have surged in popularity, with 51.2 million adults in America alone adults using applications to track their health, according to Nielsen.

That's making it harder for Weight Watchers to justify subscriptions starting at $US20 a month, since activity trackers can be paired with free mobile apps that make it easy to analyse caloric input and output.

"Weight Watchers really has to change what they're offering - they have to get modern," said Meredith Adler, an analyst at Barclays. "People are just more digital now than they ever were."

Weight Watchers hasn't stood still. The New York-based company has also embraced activity trackers. Subscribers can use FitBit, Jawbone and the company's own ActiveLink gadget to track diets and exercise.

"The whole health-and-fitness category has morphed into a positive place, with free apps and trackers for people to consider," Weight Watchers said in a statement. "We plan to be there for our members and future members by continuing to provide motivation, accountability and support whenever and wherever they may need it."

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