Oxygen Blog

Independent clubs need laser focus to compete with low-cost gyms

IHRSA contacted me recently to provide some comments on Flourish, the event I created for independent health and fitness clubs.

What follows is an excerpt from the interview as part of their Europe Insight series:

The United States and the United Kingdom have a lot in common, from our shared language to our shared love of caffeinated beverages (be they coffee or tea). However, while we have a number of similarities, we also have many differences—especially when it comes to the health and fitness market.

Ask any American health club owner what poses the biggest threat to independent clubs and they will likely tell you the same thing: boutique fitness studios.

But if you ask a U.K. club owner the same question, chances are you’ll get a different answer: low-cost gyms.

The Threat of Low-cost Gyms in the U.K.

“For the past 10 years, the recurring UK fitness industry story has been the emergence of low-cost gyms,” says Ray Algar, managing director of Oxygen Consulting. “They have captured the imagination of large parts of the general public and journalists who write enthusiastically about their simple-to-understand experience and low monthly fees.”

The prevalence of low-cost gyms, combined with the rise of the boutique studio, has negatively impacted U.K. independent clubs.

“A few years ago, I began noticing that independent clubs comprised the majority of clubs that were going bust,” Algar says. “They were struggling to grow their membership and unable to increase prices, so the life was slowly squeezed out of the business.”

From Generalists to ‘Signature Experience Specialists’

Algar believes the decline of independent clubs was caused by two main factors:

The rapid growth of low-cost brands since around 2008
Heightened consumer expectations, due to upgrades made to the leading private fitness clubs
“Many of the U.K.’s independent clubs are seen as ‘generalists’ operating with mediocre infrastructure,” he says.

The solution: smaller independent clubs need to become “signature experience specialists.”

“They must build a deep expertise in an area that they are deeply passionate about,” Algar says. “In other words, they learn from the strategy being pursued both by low-cost and boutique fitness operators which are to focus on delivering less while simultaneously raising the chosen experience to a substantially higher level.”

You can read the full article on the IHRSA website.