Why consumers love low-cost (budget) gyms
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This document discusses the popularity of low-cost gyms among consumers. It notes that low-cost gyms typically charge 50% less than average gym prices, operate 24 hours a day with minimal staff, and focus solely on fitness rather than additional amenities. These low prices and simplicity help create low barriers to entry in the market and appeal to customers seeking value. The document also examines the business model of McFit, a large low-cost gym chain in Germany, including their expansion, financials, and brand strategy.
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Why consumers love low-cost (budget) gyms
- 1. A look at why consumers love low-cost gyms Ray Algar Oxygen Consulting Leisure Property Forum London December 2009
- 3. 50% lower than average price point Ability to Heavy operate technology 24 hours use DEFINITION OF A LOW- COST GYM Club operated by Gym-only single proposition person
- 4. 1995 launch: “Fly for the price of a pair of jeans” 4
- 5. Primark Bristol store – 100,000 square feet of low-cost clothing 5
- 6. Campaign: “Everything is Premier, except the price” 6
- 7. “Spend a little, live a lot” campaign 7
- 8. SIMPLICITY LOW INCONSPICUOUS CONSUMPTION BARRIER MARKET TO ENTRY DRIVERS DIMINISHING DISAPPOINTING VALUE EXPERIENCE
- 9. SIMPLICITY LOW INCONSPICUOUS CONSUMPTION BARRIER TO ENTRY MARKET DRIVERS DIMINISHING DISAPPOINTING VALUE EXPERIENCE
- 11. Geiz ist geil which translates to: “It’s cool to be stingy!”
- 12. SIMPLICITY LOW INCONSPICUOUS CONSUMPTION BARRIER TO ENTRY MARKET DRIVERS DIMINISHING DISAPPOINTING VALUE EXPERIENCE
- 16. SIMPLICITY LOW INCONSPICUOUS CONSUMPTION BARRIER MARKET TO ENTRY DRIVERS DIMINISHING DISAPPOINTING VALUE EXPERIENCE
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- 18. SIMPLICITY LOW INCONSPICUOUS CONSUMPTION BARRIER MARKET TO ENTRY DRIVERS DIMINISHING DISAPPOINTING VALUE EXPERIENCE
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- 25. SIMPLICITY LOW INCONSPICUOUS CONSUMPTION BARRIER TO ENTRY DRIVERS DIMINISHING DISAPPOINTING VALUE EXPERIENCE
- 27. “Why am I paying for a club I hardly ever use?”
- 28. “Why am I paying £50 a month just to use a treadmill? ”
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- 40. Towns with 100,000 population 40
- 41. Edge of town 41
- 42. 1,700 – 2,500 m2 42
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- 46. McFit charge €0.50 cents to use showers – pay only for what you use
- 47. McFit sponsors Berlin Love Parade which has driven brand awareness 47
- 48. Klitschko brothers act as brand ambassadors 48
- 49. McFit v Fitness First German Club Openings 101 Fitness First 109 107 108 McFit 96 83 0 20 40 60 80 100 120 Jun-09 Jun-08 Jun-07 49
- 50. McFit v Fitness First Germany 2007-2009 280,000 Fitness 275,000 First 279,000 780,000 McFit 630,000 520,000 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 Jun-09 Jun-08 Jun-07 50
- 51. McFit Financials 2007 Euros % (millions) turnover Turnover 86 Staff costs 3.4 3% EBITDA 28 24% Interest charge 0.1 - Net assets 34 Clubs 88 51
- 52. German Market Structure - Leading brands (number of clubs) 34 358 695 Low-cost (budget) Mid-Market Premium 52
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- 54. Enjoyed this presentation? I am available for insightful presentations, workshops and consulting assignments: Contact me at: ray@oxygen-consulting.co.uk Telephone: +44 7747 69 88 55 LinkedIn: http://uk.linkedin.com/in/rayalgar Google: “Ray Algar”