Physical activity sector must unleash its social purpose to thrive, says new report

Colourful report front cover showing hand drawn illustration of a brain. From the brain is a cable and plug being held by a man in black trousers

Health and fitness clubs need to look to social purpose led brands such as Innocent, TOMS and Apple to thrive in the future according to a new report for the physical activity sector. Against a backdrop of increasing competition from local authority run leisure facilities and the rise of the low-cost gyms, the ‘Fitness Sector Social Good Report‘, authored by sector expert Ray Algar in collaboration with national not-for-profit health and physical activity body ukactive, The Gym Group and Matrix Fitness, details the critical impact of social responsibility on the growth, value and impact of the private gym sector over the next 15 years.

Accelerating innovation services offered to members and re-focusing pricing options to more readily accommodate changes in lifestyle and circumstance are just some of the recommendations the report references, in a bid to boost the value and sustainability of the sector. However the most significant gains could be made by tapping into the collective influence of a membership base that stands at almost eight million UK consumers for social good, such as charitable donation options alongside monthly direct debits, or providing the framework for members to make small positive changes that benefit society.

David Stalker, CEO, ukactive said, ‘This report is the impetus the sector needs to think beyond the size of a membership direct debit run. Securing the future growth of our sector is as much about benefiting the health and wellbeing of our customers, as it is about valuing the long term business advantages of being socially responsible. We’re committed to helping our members and partners embrace this agenda over the coming years’.

Ray Algar, former chair of Wave Leisure Trust, a social enterprise, and recognised expert on the health and fitness market added, ‘Organisations that embrace a broader definition of their stakeholders will outperform those who adopt a narrow self-serving, profit-first approach. Inspiring people to live more active and healthier lives and pursuing this in a responsible, altruistic and compassionate way, creates a powerful halo effect around a business of goodness and success.’

The report suggests that new ways of connecting with their consumer base may be more compelling for gym businesses given recent forecasts for the physical activity sector in the wake explosion of “low-cost” gyms threatening the sustainability of some of the more established brands.

In his foreword, David Stalker laments the perception that gyms are more interested in the size of their bottom line than establishing a meaningful connection with their customers’, but highlights that it is the responsibility of organisations within the sector to tackle this issue.

The report looks to the history of the gym movement, describing a rise in socially aware young entrepreneurs in the 1980s and early 1990’s keen to get the nation active. It attributes the possible reason for the gradual decline in the public’s perception of gyms to the takeover of these chains by bigger businesses and venture capital funds, which led to a more ruthless focus on the short-term bottom-line typical of the venture capitalists who sought to profit from the sector at this time.

Even that is changing. An example of where a more altruistic approach to investment in the business of physical activity already paying dividends in both the health of the nation and commercial success is The Gym Group. The Gym Group believes that everybody deserves the right to live a healthier lifestyle without paying a premium price, users are not tied into a long membership contract. Fees are kept low by joining online, and as part of the sign-up process members are given the option to support small local charities by donating any amount they like. Eight out of every 10 members donate, which makes a real difference to small charities unlikely to receive significant government or public support.

Other examples of major gym chains rising to this challenge include Fitness First which was recently acquired by Oaktree Capital. The new owners and management team at Fitness First have pledged to ‘Rewrite the Rules of Fitness’ which include taking a greater interest in the health and wellbeing of members.

Health is also the major theme at the heart of the purpose of the not for profit charity Nuffield Health and Wellbeing with a vision to offer joined up health and wellbeing.

The key points, advised by the 96 page report, that gyms need to consider within their growth strategies to change the public’s perception by conveying a social purpose include:

• Pursuing authentic and sustainable social values by remaining relevant to stakeholders;

• Promoting goodwill, resulting in a clarity of purpose that inspires staff and customers

• Building a reputation that extends beyond their geographic marketplace;

• Being generous and compassionate to customers in their good times and bad;

• A relentless pursuit to create a remarkable organisation that understands what makes people tick and move to improve the health of the nation.

Notes to Editors

1. The full report can be downloaded from the Oxygen Consulting Knowledge Store.

2. ukactive is the not-for-profit health body of the physical activity sector that unites government, local authorities, healthcare commissioners and physical activity providers to improve the health of the nation by getting more people, more active, more often. With its robust data-based insights, ukactive is uniquely positioned at the juncture between the physical activity sector, policy decision makers and commercial business. See ukactive’s turning the tide of inactivity report and designedtomove.org for figures on the levels of physical activity in the UK.

3. Around a third of the Gym Groups members are shift workers such as taxi drivers, food and beverage workers, hotel staff and bus drivers. To make physical activity more accessible and democratic, every six months the business measures its social impact on communities, employees and members. The gym group is in 15th place in the prestigious Sunday Times 100 Best Small Companies to Work for list.

4. Further information on Rewriting the Rules of Fitness

5. The report writer, Ray Algar, is managing director of Oxygen Consulting, a Brighton, UK, based company that provides compelling strategic business insight for organisations connected to the global health and fitness industry. Until recently, Ray was also chairman of Wave Leisure Trust, a social enterprise operating eight leisure centres in the South East of England. He was involved for more than six years and experienced its transition from a start-up to a highly influential leisure organisation making a significant social impact on the communities it serves. In July 2013, Ray launched Gymtopia, a digital platform that shares stories and insights about how the global health and fitness industry is creating positive social impact.

6. Ray’s previous industry reports include: 2013/2014 Review of the UK Fitness Industry, 2012 UK Low-cost Gym Sector Report, 2011 Global Low-cost Gym Sector Report, 2011 European Health Club Industry Web and Social Media Report, 2010 UK Low-cost Gym Sector Report

7. Full information on all case studies can be found in the report.