A strategic look at the emergence of the low-cost (budget) gym sector
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A strategic look at the emergence of the low-cost (budget) gym sector

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A strategic look at the emergence of the low-cost (budget) gym sector A strategic look at the emergence of the low-cost (budget) gym sector Presentation Transcript

  • A strategic look at the emergence of the low-cost gym sector FIA Seminar October 2010 Ray Algar
  • www.oxygen-blog.blogspot.com
  • My perspective neutral towards the sector
  • MINIMUM OF 50% LOWER THAN INDUSTRY PRICE SCOPE TO HEAVY OPERATE 24 TECHNOLOGY HOURS AND WEB USE MY DEFINITION OF A LOW- COST GYM ABILITY TO OPERATE CLUB GYM-ONLY WITH A SINGLE PROPOSITION PERSON
  • SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE
  • SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE
  • I Care
  • Consumers now have considerable experience of low-cost services
  • “Fly for the price of a pair of jeans” 13
  • “Spend a little, live a lot” 14
  • “More of our shoppers are using us for their whole shop instead of top-up shopping” Group MD Aldi UK & Ireland
  • 16
  • “Look good, pay less” 17
  • Think of a sector…you will find low-cost
  • 300 million units annually by 2013
  • “Quality up, cost down … way down”
  • SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE
  • SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE
  • “I can join online – no pushy sales staff to deal with!”
  • SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE
  • SIMPLICITY SUPPORTING INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE
  • 40
  • Word of mouth on steroids
  • Word of mouth on steroids
  • SIMPLICITY INFRA- STRUCTURE AFFORDABILITY MARKET DRIVERS CONSUMER CONSUMERS ARE SENTIMENT CHANGING TOWARDS CLUBS SPORADIC ATTENDANCE
  • “Why am I paying for a club I occasionally use ?”
  • “Why am I paying £50 just to use a treadmill?”
  • What do low-cost gym consumers say?
  • “It is almost free”
  • “I have never been to a gym that is £15 before. I thought I would walk in and find a lot of broken equipment”
  • 54
  • 55
  • 56
  • 57
  • 58
  • McFit Financials 2007 Euros % turnover (millions) Turnover 86 Staff costs 3.4 3% EBITDA 28 32% Interest charge 0.1 - Net assets 34 Clubs 88 61
  • “Perhaps the biggest threat we face is that someone from outside our sector, with a huge war chest of cash and proven customer-centric business model, will build 1,000 shiny new facilities, and offers budget-busting membership deals” Fred Turok, Chairman, FIA (statement from 2007)
  • Operational excellence Customer Product intimacy leadership
  • budgetgymresearch.ning.com oxygen-blog.blogspot.com Google: “Ray Algar”