UK FITNESS CLUB MARKET POWERS AHEAD AS CONSUMERS EMBRACE HEALTH AND WELLNESS
£5.1bn UK fitness club market achieved annual growth of 7.1%, with strong expansion forecast over the next 5 years.
Project Fitness UK 2018, the definitive new report from Allegra Strategies, reveals the total UK fitness club market serves an estimated 10.2 million members across more than 7,000 outlets, with circa 5% outlet growth forecast over the next five years.
The research was produced in partnership with leading leisure market intelligence specialists Leisure Database Company and leading retail and leisure field experts, The Local Data Company.
Project Fitness UK 2018 states the private sector now makes up more than half of the total fitness club market, with an estimated 6.8 million members across 4,300 gyms.
Property scarcity and low membership penetration among a new generation of value-conscious consumers represent the biggest challenges to fitness club growth. Operators must also respond to tightening consumer spend and decreased investment associated with on-going Brexit uncertainty.
Boutiques pick up the pace as smaller independents feel the burn
Allegra records strong growth in the boutique sector over the last 5 years. The burgeoning segment has successfully innovated beyond the traditional fitness club proposition, specialising in group-based, instructor-led classes. There are an estimated 250 boutique outlets in the UK, with Allegra identifying appetite for further investment in the segment.
As of May 2017, there are an estimated 2,077 independent fitness club operators in the UK according to the Leisure Database Company. A lack of capital investment funds and competition from low-cost operators is increasingly marginalising this segment.
Low-cost is the fastest-growing market segment, opening an average of 75 new outlets and attracting an estimated 300,000 new members every year. With 200 sites and 1 million members, Pure Gym is the UK’s leading low-cost private fitness club chain, followed by Anytime Fitness with 146 outlets and The Gym Group with 130.
Increased health awareness fuels UK growth but north-south prices poles apart
Profound societal changes, such as urbanisation, preventative healthcare and a focus on wellbeing are fuelling growth in UK fitness club memberships. Increasing recognition that exercise is essential to wellbeing is driving the rising popularity of fitness activities among UK consumers. 86% surveyed claim exercise is essential to their wellbeing and 32% state regular exercise is their most important health priority.
Harnessing the UK’s enthusiasm for health and wellness is a key challenge for fitness club operators. While 81% of consumers believe fitness is important, only 39% are happy with their current fitness level and just 23% agree that gym memberships are necessary for staying fit.
The average monthly membership spend across the UK is £29.68, with Allegra revealing substantial regional divide in terms of average monthly membership outlay. Consumers in the South are paying £41.07, nearly twice as much as those in the North at £22.75.
Digital integration and customisation will redefine the fitness club experience
Exercise motivation varies significantly between demographics, highlighting that operators must tailor their approach to products and services rather than adopting a ‘one size fits all’ model.
Key opportunities to hone revenue streams across core growth demographics include digital integration for millennials, holistic healthcare services for older consumers, and innovative group fitness concepts for women.
Technology will increasingly drive growth as operators move towards full-scale digital integration. Adopting new and emerging technologies, such as wearable devices and digitally-integrated equipment, will be essential for attracting new members and maximising membership retention in the coming 5-10 years.
The health and wellness market outlook
Allegra CEO and founder, Jeffrey Young said: “I’m very excited by recent market developments in the health and wellness sector. The fundamentals of the industry remain strong as UK consumers seek to improve wellbeing through the adoption of exercise for a healthy lifestyle. I see positive trends in the long-term and great opportunities for fitness clubs to continue innovating by offering new products and developing their membership propositions.”
Jeffrey Young will present key findings from Project Fitness 2018 UK at the Allegra Health and Wellness Summit, taking place at Balance Festival, 11 May 2018, Old Truman Brewery, London.
The Project Fitness UK 2018 Report is now available to purchase from Allegra Strategies.
- Over 100 online and telephone interviews with industry leaders, including CEOs and Managing Directors of major fitness club chains, key suppliers, industry associations and other industry participants (May 2016 – September 2017)
- Over 7,500+ online surveys with UK consumers (May – September 2017) and in conjunction with Men’s Health and Women’s Health.
- Desk research including trade press, company financials and online data sources
Established in 1999, and part of Allegra Group, Allegra Strategies is a leading-edge research and strategy consulting firm based in central London. Since 2002, Allegra has published research in the health and wellness sector, supporting companies globally across the health and wellness value chain and adjacent retail, leisure and consumer lifestyle sectors.
Working closely with clients across critical M&A activity, growth strategies, customer segmentation research, global expansion, pricing strategies, and NPD, Allegra analysts are well-placed to answer key business questions and help clients harness their full growth and profit potential.
Allegra Group is the owner and creator of the Balance Festival, UK’s largest celebration of the thriving health and wellness movement, and the producer of the annual UK Health + Wellness Summit. Allegra Group is also the author of the London Wellness Guide.
There are 6,728 fitness facilities in the UK, up from 6,435 in the 2016 (source: 2017 State of the UK Fitness Industry Report)
As millennials become increasingly preoccupied with their physical and mental wellbeing, has the gym become the new pub?
Jo Ellison, FEBRUARY 9, 2018
An imposing corner building south of Green Park, in Piccadilly, 12 St James’s Street occupies an area associated with London’s gentlemen of leisure. It’s the home, after all, of TS Eliot’s Bustopher Jones — the “cat about town” — who had eight different clubs and white spats. The street, rich in the grandiose architecture of wealth, is studded with members-only bolt-holes.
Twelve St James’s Street also houses an exclusive club. But unlike its neighbours its allure is not in the promise of cognacs, cigars and the company of other men but in technologies designed to “redefine your potential”. E by Equinox, which opened officially last week, is a gym commanding a £500 initiation fee, plus a £350 monthly subscription, in return for sport’s most advanced innovations. Beneath the original cornicing, nestled among vast marble colonnades, runners work out in a mezzanine area, designated the Precision Running Zone, where a suite of treadmills fitted with O2 vaporisers filter out nitrogen gas to allow the body to work harder with less stress; a Pilates studio offers the Cadillac tower, from which you can balance suspended in a state of perfect spinal alignment; and an on-site valet sits ready to launder your gym kit and hand out clean towels impregnated with the tang of eucalyptus.
The dumb-bell economy is booming. Members’ clubs and boutique gyms (those smaller outfits offering specific, signature workouts via pay-as-you-go classes) are mushrooming in every metropolitan area in which affluent folk seek a spin class. They’ve become a magnet for celebrities, too: where once the paparazzi loitered outside hotel bars until the small hours hoping for a snap of someone in a state of drunken disarray, today they stalk the morning streets searching for A-listers running into Zumba lessons, or doing ballet at the barre. Drop by Barry’s Bootcamp on Euston Road on a Saturday morning, and you may well find yourself doing an hour-long “thousand-calorie workout” alongside Victoria Beckham (who, it is said, seldom breaks a sweat).
Where once consumers looked for acquisitions to express their status, our spending habits are shifting towards more holistic expenditures. In the past 20 years, the leisure industry has emerged as one of the most dynamic, disruptive and fashionable of forces. It’s all part of a new focus on the “lifestyle experience”, a trend that has possessed consumers and found luxury brands spiking with sporty new offerings — sneakers, leggings, apps and accessories — designed to harness the burgeoning market. As Harvey Spevak, the executive chairman and managing partner of the Equinox group, likes to say: “Health is the new wealth.”
David Minton, the founder and managing director of LeisureDB, who has been tracking UK consumer habits for more than 30 years, predicts the next two years will be a “golden age” of fitness. “The industry is likely to hit several milestones in 2018,” he explains. “The number of UK gyms is on course to go over 7,000 for the first time, total membership should exceed 10m, market value is expected to reach £5bn and the penetration rate should easily surpass 15 per cent. The growth will only be limited to the imagination of those pushing the boundaries.”
Likewise in the US. According to Marketwatch, Americans spent $19bn on gym memberships last year — and a further $33bn on sports equipment. But the study’s most significant feature was the scale of millennial spending: 36 per cent of 18- to 36-year-olds paid for a gym membership — twice the percentage of people older than them.
On a Wednesday lunchtime in midwinter, Equinox’s new Piccadilly outpost reflects these statistics rather well. The turnout is fairly evenly split between men and women, and most of them appear to be under 35. Some wear the hipster uniform — hoodies, man-buns, beards — others are more tidy and corporate-looking. A young woman performs a series of hanging leg lifts — up and down, up and down — with the same core strength and grace as the gymnast Simone Biles.
“They’re Type A personalities,” explains Spevak. A Bronx-born executive whose own schedule runs to three sessions a week with a personal trainer, five weekly runs on the treadmill and, when he can, a couple of SoulCycle classes, he’s fairly Type A himself. “They want it all,” he continues. “They want to figure out a way they can feel good, look good, be active, and be with like-minded individuals as well as thrive in whatever their personal objectives are . . . That could be their career, their relationship with their spouse, getting ready for their wedding, or post-divorce. It runs the range. Everybody’s got their own objectives. But our mission is helping people maximise the potential within themselves, and nobody does a better job at that than we do.”
Part of the US-based Equinox portfolio, E by Equinox is the second of the group’s standalone gyms of its type — the first opened in Kensington in 2012 — and the most expensive. Further Equinox fitness clubs will open in Shoreditch and Bishopsgate in late 2019. According to Spevak, the club offers “full-service luxury fitness using science-based research to create an experience that satisfies a high-performance lifestyle”. He wouldn’t mind at all if I described it as the Hermès of the exercise world.
Spevak has spent 25 years working in the leisure sector. He was an early gym pioneer. At Equinox, he oversees a portfolio that also includes Blink Fitness, a more accessible gym that operates 65 clubs across the US, and SoulCycle, the cult exercise boutique they purchased in 2011, and which currently operates 84 US outposts (it will arrive in London soon). Last month, they bought a minority stake in Rumble, a boxing boutique whose unique selling points are their “teardrop-shaped, water-filled” training bags and a “premium nightclub quality sound system”. It currently has two branches in New York.
As a privately owned company, Spevak won’t disclose the numbers, but business is brisk: Equinox’s 92 clubs currently have about 350,000 global members, who spend a “blended average” of about $3,500 each year. Blink Fitness is closing in on almost 400,000 members spending about $250 a year. Spevak will spend a further $1bn “in fresh capital” on reinvestment and expansion over the next five years. “We’ve always been a high-growth company,” says Spevak. “And high growth as we see it means growing 10 to 15 per cent from a profit perspective. That’s how we’ve grown for years, and that’s how we continue to grow.”
Meanwhile, next year will see the first Equinox hotel opening in New York’s Hudson Yards, the first in a rollout of Equinox hotels earmarked for billions more in investment. The hotels will be founded on the same full-service ideal as the clubs. “Our vision for the hotels is to cater to the high-performance traveller,” says Spevak, “and we think about it as we do, historically, from a science perspective. We call it MNR — movement, nutrition and recovery — where a high-performance lifestyle and a healthy lifestyle is a three-legged stool.” The clubs will also be a key feature of the hotels, where local members will be encouraged to work out with hotel guests in order to curate a more “authentic” traveller experience. “Because, if you think about it,” says Spevak, “nobody wants to hang out in the hotel restaurant or the hotel lobby with another business traveller.”
Twenty-five years ago, it was a different story. In 1999, investors weren’t interested in building gyms. “When I went to landlords and to investors, trying to raise capital, they would say to us, ‘You’re in a fad business, I don’t believe you’re going to exist in the future,’ ” says Spevak. At the time, there wasn’t a lot of stickiness in the gym world. “It was very mom-and-pop-y,” he continues, “and the financial and real estate community just didn’t want unstable business in their space. They didn’t want something that connoted something that they didn’t feel good about.”
Sitting in St James’s, in an area unparalleled for its grand associations, it’s clear how far that attitude has shifted. In the current landscape, businesses clamber over themselves to advertise their proximity to clubs. The gym has become a landmark feature in areas looking to gentrify and regenerate. And we’re all signing up. No question, millennials have had a profound influence on this new enthusiasm for exercise. As pubs continue to close at a rate of 29 a week, according to the Campaign for Real Ale, the culture of leisure is changing. That young people today prefer to sweat pints than to sink them is a fact we must consider. A study conducted by the student letting app SPCE last year found drink featuring last on the list of student expenditures, with 18 per cent of the 2,000 people asked saying they spent nothing on alcohol at all.
Additionally, as our lives have become busier, atomised and more urban, the gym has emerged as the new place in which to gather: to be part of a community. As Minton points out, not only are millennials more likely to buy gym memberships, they’re driving the boutique business as well. The rise of the group workout, club membership and all of the attendant accessories that come with it have become part of the new language of “wellness”. Self-care is now considered a luxury indulgence, and one’s club the new status symbol.
“Today’s consumer has an insatiable appetite for healthy living, or — as we call it — high-performance living,” says Spevak. “And that is a dramatic change from 25 years ago. If you were a health nut in 1995, you probably went to the gym twice a week. Today, being a health nut means taking two classes a day. The consumer wants to be healthy and feel good and look good. And you don’t just see it in our category, you see it in beauty and skincare. You see it manifesting itself in so many different ways.”
Where you work out, who you work out with, and what you wear to work out in have become totems of fashionability. Spevak traces the first shoots of the wellness trend to 9/11, when he saw a jump in the number of people becoming focused on holistic health and taking care of themselves. The proliferation of gyms in the years after was also a product of the 2008 recession, which opened a swath of prime real estate the new leisure entrepreneurs could exploit.
But more than anything, the fitness boom must be a corollary of a digital revolution in which working out has become a ubiquitous feature of our online life; our social media feeds are saturated with videos and images of people doing dance classes, or advanced yoga poses, or supping post workout smoothies. Podcasts proliferate with meditation guides, sleep guides and inspirational lectures to make us more active. The gym hashtag has become a key signifier of a tribal society seeking to identify itself as part of a gang. Could one of the weirder ironies of phone addiction, and our increasing self-absorption, be to make us more health-conscious? As if to speak to precisely that point, I observe a young gym-goer in a crop top and leggings flashing selfies as she readies to work out.
“People go to the gym because they want to identify with the people they see there,” says Spevak. It’s presumably this same instinct — to engage and be seen as being part of something — that possesses a world-famous star such as Beyoncé or Victoria Beckham, who could afford to build state-of-the-art gyms in their basement, to attend group classes in public instead. “While we believe the home experience is growing, it’s a compliment,” says Spevak. “But at home you don’t get the chance to be with your community; and your community could be your bestie, or your partner. Or just like-minded people that you want to hang out with.”
Minton agrees that a gym’s success depends on cultivating this tribal loyalty, delivering a unique experience and then selling product that marks its members out. “Some of the most interesting clubs are those that are expanding into less obvious areas,” he says. “We now have over 600 boutiques across the UK and they are growing faster than traditional gyms as they have a smaller footprint and can take pop-up spaces. One of the best examples is Boom Cycle at the Curtain hotel [in east London].” The club takes over the hotel’s nightclub during the day, “and then morphs back into a club at night”.
The experiential market is throwing a lifeline to retailers, as well. “The fashion link is growing,” adds Minton. “Fitness apparel brands like Lululemon, Sweaty Betty, Reebok, Nike all now offer free in-store workouts, which provide them with an opportunity to market their brand lifestyles more directly and forge a connection with the consumer.”
The E by Equinox tribe is a crack elite. At the bar, an alpha type with hipster hair takes a conference call with his New York office. At the club’s food bar, Munch Fit, women choose between protein smoothies with ingredients such as acai, cashew butter and whey protein. Post-valet, they are dressed in the designer wardrobe of the super-wealthy: all Dolce & Gabbana and Chanel bags — one is enveloped in a huge Balenciaga shearling throw. Such a material display of wealth seems incongruous where one’s status is more often insinuated via the tier of trainer you chose to work with and how often you like to be embalmed in a cryogenic wrap.
On a wall near the entrance sits a range of branded sportswear, T-shirts and water bottles all marked with the Equinox stamp. I wonder whether a water bottle might one day surpass the handbag as a status symbol? “The demise of retail is a permanent shift,” says Spevak. “It doesn’t mean retail’s going to go away, but it’s going to look very different. The consumer, in my opinion, will continue to buy nice things for themselves, but I think in the scheme of priorities the experience is more important than the handbag.”
In the distance, a now-familiar whirr from the mezzanine announces the start of another oxygen-rich run. Eucalyptus infuses the air. The scent of wellness is very rich indeed.
Original Article - Financial Times
Anytime Fitness, Everlast Fitness, Fitness Space, Pure Gym, Snap Fitness and The Gym Group are private UK fitness brands which opened new clubs in January 2018. Will the UK fitness industry continue to see growth throughout the year, with the private sector as the main driving force?
As an estimated 80 per cent of CV equipment will be able to link up to Apple’s GymKit within a few years, the future will be all about data. Rather than threaten the role of the PT on the gym floor, I think data driven equipment will have the opposite effect and people will need more help, advice and reassurance on how to interpret it most efficiently. And, just as the car industry is having to adapt to the presence of electric cars, the fitness industry will also adapt. It will be more software than equipment led. With Apple, the largest tech company in the world, moving into our space and making it a data game, people’s perceptions of exercise will change. The gym is likely to be incorporated into everyday wellness habits like walking and climbing stairs. Data will give PTs the opportunity to get more involved with their clients between sessions, give personal push notifications, see what their clients are doing when not at the gym and praise them. This innovation will also involve more people from different levels of society, as one of the reasons why lower income groups don’t engage is because they often don’t know where to start. Operators will be forced to adapt, because their clients will adapt, but they should embrace the change.
Original Source: Health Club Management - issue January 2018, pg. 37
UK FITNESS MARKET
The total UK fitness market has just over 6,700 gyms and an overall penetration rate of 14.9%. England, the largest and most populous country, is home to most of the UK’s gyms; it also has the highest penetration rate (15.3%). Northern Ireland, Scotland and Wales all have penetration rates over 10%. How much growth will the industry see in 2018?
Once upon a time, hard, regular physical exercise was part and parcel of our daily existence, rather than an optional extra we fitted in in our spare time. From ancient times until really fairly recently, our ancestors didn’t need expensive gym facilities to stay in shape. From hunter-gathers to farm labourers to industrial workers, a combination of physically demanding manual work, walking rather than driving, and a daily calorie intake restricted by necessity rather than choice, kept us active (if not always healthy). It’s little surprise that many of us struggle to keep fit in the modern era of sedentary jobs, widespread car ownership, and virtually limitless opportunities to snack.
This has created a burgeoning boom in businesses dedicated to keeping us healthy. In 2006, 13% of adults in England took part in regular fitness activities. By last year, this had risen to 16%. Today, one in every seven people in the UK is a member of a gym, and ever more are signing up. In the year to the end of March 2017, overall UK gym membership numbers grew by 5.1% (6.3% in terms of value), according to the 2017 State of the UK Fitness Industry Report by health and fitness consultancy LeisureDB. Meanwhile, the sector has grown globally from being worth $67bn in 2009 to $83bn last year. And it’s not just about going to the gym. Every aspect of the fitness industry – from sports centres to healthy foods to tracking technology and even “activewear” – is expanding rapidly. People don’t just care about what they do with their bodies, but also about what they put in them and on them.
Indeed, says David Minton, founder of LeisureDB, the industry is entering a golden age. Individuals are increasingly aware of the need to look after themselves, helped both by public health campaigns and (in the UK) the ongoing post-2012 Olympics “halo” effect. Meanwhile, fitness facilities are ever more widespread and of higher quality, customer service is improving, and gym membership is becoming more affordable, says Steven Ward, chief executive at UK Active. While the 16- to 34-year-old demographic is the key target market (young consumers generally are), the older generation is also increasingly interested in getting into shape.
Then there’s the expanding role the government sees for the industry. We wrote about the obesity epidemic a few months ago in MoneyWeek, but increasingly there’s a new public health enemy number one – inactivity. Physical inactivity is the largest cause of premature mortality globally, according to the World Health Organisation. Nearly 13 million people in the UK are classed as physically inactive, meaning they fail to rack up at least 30 minutes of physical activity per week. The fitness industry can only benefit from government efforts to tackle that. Indeed, all of those inactive adults represent a significant growth opportunity.
Big health is big business
As demand has grown, the range of options for keeping fit has widened considerably. These days, in most British cities, you’ll see a fitness centre on every other street corner – be it a low-cost gym, a boutique gym or an expensive health club with fancier facilities. Much of the industry’s growth is arising at the budget end of the market. There are now more than 500 low-cost clubs (defined as those charging less than £20 a month), accounting for 15% of the market value and more than a third of total membership. Beyond offering keen pricing, budget chains attract customers by offering 24-hour access (so you can work out around your working day) and freedom from annual contracts.
These budget gyms often appeal to first-timers who, as they become fitter, may work their way up the market, says Minton. Boutique gyms are smaller and more exclusive than low-cost gyms, and tend to focus on one specific area of fitness. Alternatively, health clubs are larger and more anonymous, but usually have the most extensive facilities, with spas and swimming pools. But whatever the entry level, the two key staples of the fitness industry are gym sessions (people working out individually) and fitness classes (exercising as a group), says Lisa O’Keefe, director of insight at Sport England. Almost 4.5 million people do gym sessions regularly and 1.6 million people take fitness classes. Men generally tend to stick to weightlifting, while women typically favour group workouts, says O’Keefe. This is a trend that has become more apparent fairly recently, helped partly by the high profile of female athletes at the London Olympics in 2012.
The industry itself – not unlike the fashion business – is very good at creating and responding to demand, generating an ongoing stream of new classes to capture fickle consumers’ imaginations. A couple of years ago, Zumba was the “in” exercise. Today, CrossFit, yoga and innovative spinning (cycling on the spot) classes have taken over. Even nightclubs have joined in – they provide exercise classes during the day and put the gym equipment away for the night.
It’s about what you eat too
Interest in healthy eating is booming too. And you don’t have to be an ardent gym bunny to care about watching what you eat. For example, the UK market for organic food is now worth nearly £2.1bn, and is growing strongly – total sales of organic food grew by 7.1% last year, according to the Soil Association, while non-organic sales fell. A growing number of companies now provide healthy meal and nutrition plans delivered direct to your door.
However, above and beyond those who desire a more healthy diet, there’s a growing appetite for supplements and specialist foods aimed specifically at gym fanatics, bodybuilders, professional athletes and enthusiastic amateurs: everything from so-called “superfoods” packed with vitamins and antioxidants to protein shakes. It’s fair to say that the scientific benefits of many of these supplements are the subject of debate and others are simply soft drinks repackaged as “lifestyle” brands. Yet demand for these products is growing just as, if not more, rapidly than the market for organic food. The global sports nutrition market is already worth nearly $30bn and it’s expected to grow at an annual rate of around 8.1% for the next five years, to reach a value of $45.27bn by 2022.
The rise of “athleisure”
The growing cult of the body – with everyone from celebrities to fitness bloggers to “ordinary” people given to posting snapshots of their “rock-hard abs” on social media – has also fuelled a desire to look good in workout gear. Scruffy tracksuit bottoms won’t cut it in your high-end boutique gym, leading to a rapidly growing market for athletic products and apparel. Increasingly that trend is spilling out into the high street. Sportswear is not just for exercise. Indeed, many people who wouldn’t go to the gym if you paid them will nevertheless snap up expensive “athleisure” gear. According to GlobalData, growth in the sportswear sector is set to outpace the total UK clothing market this year, which itself is expected to grow by 2.1%.
Indeed, the fashion trend is so popular that many wonder how long its vertiginous rise can be sustained. However, investors can relax – even if UK consumers start to find new fashions, the global trend remains robust, driven partly by growth in China. In fact, global athletic wear sales are expected to increase by nearly 20% by 2021, to $355bn from $290bn currently, according to analysts at Morgan Stanley. This can be attributed to the increasing number of luxury fashion designers turning their eye to sportswear. Stella McCartney designed the Team GB kit for the 2012 Olympics, and since then both Chanel and Dior have released couture trainers, while Alexander Wang launched an athletics range for H&M. The activewear trend has, of course, also boosted sports brands such as Nike and Adidas.
A robotic nag
Another growing obsession – both in terms of physical health and the wider self-help movement – is the drive for relentless self-improvement via the formation of healthy habits. This usually involves keeping some sort of record of your activities, which in turn has increased demand for devices that can track what you do – and nag you gently (or not so gently) when you fail to achieve your daily targets.
The chances are that you already have such a device – or at the very least, your smartphone has the capability to act as a fitness tracker if you download the right app. Technology is disrupting most businesses on the planet and the fitness industry is no exception. Wearable devices – from phones to smartwatches to simple wristbands – mean that you can now easily track how far you’ve run, what speed you’ve been going at, and how many calories you’ve burned. And a few days after your run, you’ll get an electronic reminder that you found 7.30pm on Tuesday evening to be a convenient time for a workout – don’t you think that now is the ideal time for another one?
This ability to track our progress and to adjust our exercise patterns accordingly has in turn fuelled even more demand for yet more data and analysis. As a result, the global wearables sector is expected to rocket in value from $23bn last year to $173bn in 2020, according to global analyst MarketsandMarkets.
The disruption caused by technology in the fitness industry isn’t all about wearable technology. The software at the back-end of a fitness centre is just as important – whether it be a booking system, a management tool for members’ access to the facility, or an automated sales system. In the future, these customer-relationship management (CRM) systems will undergo major changes as artificial intelligence becomes increasingly popular, reckons Minton.
The goal of any fitness services provider is ultimately to make the process more seamless – the fewer hurdles there are between a customer joining the gym and following through on their good intentions to use it, the more profitable the gym is likely to be. Artificial intelligence will help to personalise membership for each customer – your gym’s software will learn what type of activity you like, and send personalised “push notifications”, informing you of upcoming classes you might enjoy and offering to book you in for a session. Just as wearables already know your preferences, so your local gym will too.
The five best stocks to buy now
If you want to invest in the growth of the fitness market, US-based Planet Fitness (NYSE: PLNT) is one of the largest and fastest-growing gym chains in the world, with around seven million members. The company’s quarterly revenue has climbed 12.1% year over year to $97.5m, but unfortunately, that rapid growth appears to be thoroughly priced in after the share price surged following the strong results – it now trades on a steep price/earnings (p/e) ratio of 45. An alternative UK-based option is the low-cost fitness chain The Gym Group (LSE: GYM). The company has 95 gyms in the UK and plans to open another 20. It’s growing fast too – it saw revenue rise by 18.8% to £42.8m in the six months to June 30 – but trades on a slightly less eye-watering forward p/e of below 30, which is just about reasonable (though still not cheap) given the growth rate.
On the dieting side, there are several big US firms that produce diet plans and low-calorie foods, including Weight Watchers and Medifast. Ever so slightly cheaper than either of those – on a forward p/e of around 25 – is Nutrisystem (Nasdaq: NTRI). Brokers are targeting an average price of around $70 a share for the stock, compared with its current level of just below $50. Another option you may be considering is supplements provider Herbalife, given its p/e of 14. However, we’d be wary of this one – Herbalife is a consistent short-selling target, and while it has thwarted the shorts so far (notably hedge-fund manager Bill Ackman), we wouldn’t risk investing without doing detailed due diligence first.
A key brand to keep an eye on in the activewear sector is Adidas (Frankfurt: ADS). In North America, sales jumped 31% in the last quarter, topping $1bn in the region at a time when Adidas’s two biggest rivals, Nike and Under Armour, have struggled to keep sales up on their home turf. On a p/e of 28, it’s not cheap, but of the big brands it currently looks the best option. A less obvious bet is Lululemon Athletica (Nasdaq: LULU). The upmarket yoga and fitness gear company has struggled amid concerns over potential competition from Amazon and Nike, but continues to expand both internationally and in other areas, such as men’s clothing.
On the tech side, one option is Mindbody (Nasdaq: MB). This $1.5bn firm provides cloud-based business-management software and payment systems for “the wellness services industry”, and offers an app designed to help users find and book exercise classes. It doesn’t yet make a profit, so it’s risky, but revenues are growing fast.
Original Article: Independent.IE
If you’re heading to London for Christmas shopping, there are a few ways to preemptively offset the effects of the Christmas pudding.
In the city of the Thames, sportswear brands like Lululemon, Reebok and Nike are offering free classes to their customers.
Lululemon provides a free yoga or fitness class on Sunday mornings in its Marylebone store in London, for example. Yoga mats are provided.
In Reebok’s Fit Hub in Covent Garden, it offers free evening classes like 'Gymbox’s Badass', 'Hardcore HIIT', and 'Contortion Yoga'.
These brands are expanding their focus and building relationships with their consumer, David Minton, a keynote speaker at tomorrow’s Ireland Active conference, told independent.ie.
"Some of the big brands are getting into fitness and offering it free of charge - people like Nike who are offering free runs. In Reebok, you can join one of their classes in the Fit Hub. Lululemon are offering free classes in their shops and they create studios in their shops. Sweaty Betty is a London brand and are offering free classes," he said.
"This is a new area where the brand is looking to create more of a relationship with the consumer."
How is this impacting the health and fitness industry, Minton asks.
"We don’t know yet because they’re trying to build a direct relationship with the consumer, not just sell them a kit."
According to Minton, the free classes aren’t just getting a big take-up. It’s also the boutique-style, higher end shops and gyms that are going from strength to strength.
"The biggest trend is in boutiques. I’m aware of the advertising that people like Ben Dunne do and how people are trying to provide lots of things for very little money. In London, we’re now going to the opposite extreme, low cost is amazingly successful, for people who are paying below 20 pounds per month. Now just imagine if people are paying 20 pounds per session or more," he said.
"There are new boutiques that are all expanding in the UK.
"They provide night club lighting, night club sound, better look facilities, and top instructors, and you feel you’ve had a top experience.
"Maybe some people are not having the Starbucks and instead having the experience."
UK Fitness Members
The 2017 State of the UK Fitness Industry Report states that membership within the UK gym sector is growing. In 2015, the total number of fitness members was 8.8 million which increased to 9.7 million in 2017. For the first time in 2016, the total number of fitness members exceeded 9 million. Will 2018 be the year that membership surpasses 10 million?
David presented at the IHRSA European Congress on Wednesday. His presentation looked at the state of the European fitness markets, particularly within the UK. He also led a tour group around 3 Central London clubs; Third Space Soho, EasyGym Oxford Street and the Oasis Sports Centre, Covent Garden.
Here are some infographics used in his presentation...
David visited Tokyo last week to attend a number of Japanese fitness industry events.
He met with the President of Sasakawa Sports Foundation for the release of their white paper on "Sport in Japan 2017". He presented to the Fitness Industry Association of Japan and the Waseda University.
He also visited a number of health clubs. boutique studios and gyms including Aqua Sports & Spa, Deportare Club, R-Fitness, B-Monster Boxing and Anytime Fitness.
David will be presenting his thoughts on the UK Fitness Industry in Tokyo, Japan this week. On his return to London, David will be speaking at the opening of the 2017 IHRSA European Congress.
His agenda is as follows:
- 13th October > Meeting with the Japan Sports Agency & presenting at the Waseda University
- 16th October > Meeting with the Development Bank of Japan
- 17th October > Presenting to Sasakawa Sports Foundation
- 18th October > Presenting to Sasakawa Sports Foundation
- 20th October > Presenting to the Fitness Industry Association of Japan
- 23rd October > Presenting at the IHRSA European Congress in London
IHRSA Opening Keynote - The State of the UK Fitness Market lead by David Minton...
The UK is unique in auditing the fitness industry in granular detail each year. The Leisure Database Company has developed a consistent methodology for the industry and built a database now used by operators, suppliers and financiers to the industry. You will receive highlights from the annual State of the UK Fitness Industry Report, which includes trend analysis, growth in number of gyms, members, value of the industry and the penetration rate, which reached 14.9% in 2017. David believes the UK is beginning the golden age of fitness and will share his projections of growth leading to 2020.
The Tokyo Olympics in 1964 made history by being the first to be telecast internationally and popular sports, including judo and sumo wrestling, were broadcast in colour. Public interest in the Games also created a lasting legacy which organisations around the world have adopted and keep adopting today.
To paraphrase Neil Armstrong on the Apollo 11 moon landing, that’s 10,000 steps for mankind and one giant step for a healthier society.
Published findings found that the average Japanese person took between 3,500 to 5,000 steps per day. A Japanese research team lead by Dr Yoshiro Hatano capitalised on these findings and the nations interest in sports. The team recognised that if this could be increased to 10,000 steps a day, people would become healthier. And so, Dr Hatano began selling a 10,000-step pedometer known as ‘manpo-kei’ (10,000 step meter) and this arbitrary number quickly grew into the ideal daily number to aim for. Japan’s Ministry of Health still recommends a daily walk of 8,000 to 10,000 steps.
Fifty years later the UK National Obesity Forum, which says the average Briton walks about 3,000 -4,000 steps a day, suggests we should aim for between 7,000 and 10,000. The National Health Service (NHS) is promoting “Walking for Health” as it is simple, free and one of the easiest ways to get more active, lose weight and become healthier. In London, the NHS is working with Transport for London (TfL) to encourage walking as part of your journey to work, walking to the shops, using the stairs instead of the lift, leaving the car behind for short journeys. Both organisations are encouraging people to use apps to track how much and how fast you’ve walked. TfL have produced maps showing walking times between stations to encourage a variety of walks including parks, trails, towpaths and nature reserves. My local favourite is from Paddington, which is Zone One to Warwick Avenue, one stop on the Bakerloo Line but in Zone 2. The walk goes along the canal, past the Robert Browning Island in Little Venice, where the Regent’s canal and Grand Union Canal meet. You save money and have a car free walk.
Promotion of walking groups and inspiring walks are growing in popularity along with the more established Ramblers organisation, Britain’s walking charity also promoting walking for health. The UKs National Parks run free guided walks for the whole family during holidays. Walkit, Active 10, Hikideas are just a few of the apps you can download that can suggest routes, journey time, calorie burn, step count and carbon saving.
The technology for a pedometer has changed over the past 50 years with the so called wearable market growing from nothing in the mid-sixties to an estimated $26 billion by 2019 and an estimated 245 million wearable devices being sold next year. Smart watches are now the most valuable segment, taking 60% of market value but fitness trackers remain most popular, accounting for more than half of all wearable shipments in 2016. Smart phones and watches have been tracking our every move and that data usually goes into an app so you can see the results. Most of the apps also allow you to load workout data from other activities and wearables into your phone activity app so it’s all in one place. The iPhone 5 was the first phone to contain a motion coprocessor, developed by the UK’s most successful technology company ARM Technologies, based in Cambridge, recently sold to Japanese SoftBank for £24 billion. ARM technology is used in over 90% of all smart phones worldwide. With the release of the iPhone 6 Apple Health was introduced to present activity data back to its owner via an app on every Apple phone.
Most governments’ guidelines and health agencies plus organisations such as the World Health Organisation (WHO), US Centre for Disease Control (CDC), US Surgeon General, American Heat Foundation, US Department of Health and Human Services recommend daily activity of 10,000 steps. A study published in the Journal of The American Medical Association concluded that use of a pedometer (or a tracking device) is associated with significant increase in physical activity and decreases in body mass index and blood pressure.
At Tokyo 2020 we will all be busy urban adventurers and 10,000 steps a day will be easily completed going from one event to another. It will be a fitting tribute to Dr Hatano that so many people will be doing 10,000 steps in his city 50 plus years after he invented the basic metric to good health.
By David Minton, Director of LeisureDB & Correspondent for SSF in London
Original Article: Sasakawa Sports Foundation
The 2017 State of the UK Fitness Industry Report reveals that 1 in every 20 people are members of a public gym. The public sector has over 2,700 gyms across the UK and Greenwich Leisure Limited (GLL) is the top operator. For the first time in five years, the public sector has seen a slight decline in membership numbers. Is this due to a combination of operating budgets being reduced and the impact of the private low cost market?
The 2017 State of the UK Fitness Industry Report revealed that the UK health and fitness industry is continuing to grow. David Minton, Director of LeisureDB said: “It may be premature to call the period to 2020 “the golden age of fitness” but further growth will only be limited to the imagination of those pushing the boundaries. The signs are there that the industry is likely to hit several milestones in 2018. The number of gyms is on course to go over 7,000 for the first time, total membership to exceed 10 million and market value to reach £5 billion”.
There is no better time to watch sport in England than the summer months. The unique collection of sporting events is known as the ‘season’ and runs from May to August each year. Many of these sporting/social events evolved in the 17th and 18th centuries by the landowning aristocratic and gentry families to affirm their privilege and social superiority. The social elite lived, for the most part, on their country estates but spent the summer in London to socialise, play and watch sport. It was also an opportunity to mix with royalty, as most events had, and still has, royal patronage.
The Sports season remains heavily biased towards equestrianism. Royal Ascot, founded in 1711 by Queen Anne, is still owned by the Crown Estate. The Queen arrives each day during Ascot Week, with members of the Royal Family, along the track in horse drawn landaus. Fashion is a huge part of Ascot culture, particularly the impressive and over-the-top hats worn by the ladies.
The Derby is the richest horse race in Britain and the most prestigious of the five classics and was first run in 1780. The Epsom Downs Racecourse in Surrey brings rich and poor together and to this day crowds need not pay a penny to watch the race and all can enjoy the race and funfair from the Downs. This famous flat horse race, over a distance of one mile, four furlongs and 6 yards (2,420 metres) is on the first Saturday of June each year. It has inspired many similar events around the world including the Tokyo Yushun.
The Grand National first ran in 1839 over the National Course which includes 16 fences, at Aintree Racecourse near Liverpool. It is now estimated that up to 600 million people in over 140 countries, including Japan, watch this most valuable jump race in Europe.
Tennis started at the All England Lawn Tennis Club (AELTC), home to Wimbledon, in 1877 and it’s estimated that over 1 billion people watch Wimbledon worldwide. There’s only 375 Full Members of AELTC which is based on the number of seats in the original stand. Around 70 honorary memberships are held by past singles championship winners.
The world’s first multipurpose sports complex to be built in 1886 was The Queens Club in Hammersmith. It still has 27 outdoor lawn tennis courts, 2 Real Tennis courts and organises one of the pre-Wimbledon competitions each June.
The Lords Test Match takes place at the Marylebone Cricket Club (MCC) which was founded in 1787. There are 18,000 full members and 5,000 associate members of the MCC who collectively own the ground and the Ashes. The term ‘ashes’ was first used after England lost to Australia on home soil in 1882. The MCC members wear the famous red and gold striped jacket and tie, affectionately referred to as ‘egg and bacon.’ The waiting list to become a full MCC member is 27 years.
The Boat Race, on the River Thames, between Oxford and Cambridge Universities, began in 1829 and takes place each year with an estimated 250,000 spectators watching from the riverside and bridges. The spirit of competition is so strong between the teams that Olympic standard rowers often compete. Sir Mathew Pinsent, who rowed for Oxford in 1990, ’91 and ’93 went on to win 10 world championship gold medals and four Olympic gold medals.
Outside London on the Isle of Wight, Cowes Week which began in 1826 and is run by one of the most prestigious and exclusive yacht clubs in the world. The Royal Yacht Squadron which was started in 1815 by 42 original members who agreed to meet every three months for dinner. 200 year’s later membership has grown to just 450, there’s no waiting list, you wait to be invited. 1,000 boats in up to forty different handicap multihull classes race every day for eight days. It’s the mixture of classic, including several boats that raced more than 50 years ago, plus ultra-modern designs, that gives the regatta its uniqueness. Around a third, of the 8,000 competitors, are women and the range is from Olympic and world class to weekend sailors. Traditional seafaring members can also be found at the Royal Thames Yacht Club, founded in 1775 it is the oldest continuously operating yacht club in the world with its prestigious club house in Knightsbridge overlooking Hyde Park.
The most colourful water event is Henley Royal Regatta, the undisputed home of British Rowing and rich pageantry. First held in 1839. Rowing crews and former oarsmen wear handmade blazers in the colours, stripes and monogram of their team all topped off with a straw boater for men and a silk item for ladies. There’s a ten year wait to become a full member.
Dress codes apply to all events, particularly where the Queen plays an official role and if you have access to the Royal Enclosures, Member Areas, or Stewards Enclosure. At Royal Ascot, (pronounced Ascut), in the Royal Enclosure, gentlemen are required to wear either black or grey morning dress including a waistcoat with top hat. At Henley in the Steward’s Enclosure gentlemen must wear a jacket and tie and rowing club colours on a blazer or cap are de rigueur. Besides the dress code most events also insist on enamel style lapel badges and tags to comply with the traditional expectations of an Edwardian period garden party.
Between the sports wider arts and horticulture events began including; the Proms at the Royal Albert Hall in 1895, the Chelsea Flower Show, organised by the Royal Horticultural Society in 1804 and the Royal Academy Summer Exhibition, 1768. The Trooping of the Colour, one of the oldest seasonal events began in 1748. Many newer events have become firm favourites of the ‘season’ including opera in the country, like Glyndebourne and in London at Holland Park, Kensington. Polo on Smiths Lawn, Windsor, home to the Guards Polo Club the largest in Europe in terms of members and grounds. Badminton Horse Trials started in 1949 against the backdrop of the Dukedom that was created in 1682 and the 17th century Badminton House. The Royal Windsor Horse Show, first started in 1943 is now the only show in the UK to host international competition in show jumping, dressage, carriage driving, endurance and showing.
This year the ‘season’ has also had a sell-out exhibition at the British Museum, Hokusai, Beyond the Great Wave. Katsushika Hokusai (1760-1849 is one of Japan’s most famous artists and this exhibition takes you on a journey through the last 30 years of Hokusai’s life. A time when many of the English ‘season’ events were just starting.
For SSF - July 2017
The private low cost market
The 2017 State of the UK Fitness Industry Report reveals that the UK health and fitness industry is continuing to grow. This growth is being primarily driven from the private sector, which has more clubs, more members and a greater market value than ever before.
The low cost market has continued to be the main driving force behind the private sector growth. There are now over 500 low cost clubs which account for 15% of the market value and 35% of membership in the private sector. The UK’s leading low cost operator is Pure Gym with over 180 gyms.