Download - Why consumers love low-cost (budget) gyms
A look at why consumers love low-cost gymsRay Algar Oxygen ConsultingLeisure Property ForumLondonDecember 2009
2www.oxygen-blog.blogspot.com
DEFINITION
50% lower
than
average
price point
Heavy
technology
use
Ability to
operate
24 hoursDEFINITION OF A LOW-COST GYM
Gym-only
proposition
Club
operated by
single
person
4
1995 launch: “Fly for the price of a pair of jeans”
5
Primark Bristol store – 100,000 square feet of low-cost clothing
6
Campaign: “Everything is Premier, except the price”
7“Spend a little, live a lot” campaign
MARKET
SIMPLICITY
LOW
BARRIER
TO ENTRY
INCONSPICUOUS
CONSUMPTION
MARKET
DRIVERS
DISAPPOINTING
EXPERIENCE
DIMINISHING
VALUE
MARKET
SIMPLICITY
LOW
BARRIER
TO ENTRY
INCONSPICUOUS
CONSUMPTION
MARKET
DRIVERS
DISAPPOINTING
EXPERIENCE
DIMINISHING
VALUE
Geiz ist geil which translates to:“It’s cool to be stingy!”
MARKET
SIMPLICITY
LOW
BARRIER
TO ENTRY
INCONSPICUOUS
CONSUMPTION
MARKET
DRIVERS
DISAPPOINTING
EXPERIENCE
DIMINISHING
VALUE
MARKET
SIMPLICITY
LOW
BARRIER
TO ENTRY
INCONSPICUOUS
CONSUMPTION
MARKET
DRIVERS
DISAPPOINTING
EXPERIENCE
DIMINISHING
VALUE
17
MARKET
SIMPLICITY
LOW
BARRIER
TO ENTRY
INCONSPICUOUS
CONSUMPTION
MARKET
DRIVERS
DISAPPOINTING
EXPERIENCE
DIMINISHING
VALUE
19
20
21
22
23
24
DRIVERS
SIMPLICITY
LOW
BARRIER
TO ENTRY
INCONSPICUOUS
CONSUMPTION
DRIVERS
DISAPPOINTING
EXPERIENCE
DIMINISHING
VALUE
Declining attendance
“Why am I paying for a clubI hardly ever use?”
“Why am I paying £50 a month just to use a treadmill? ”
30
31
32
33
36
37
38
39
40
Towns with 100,000 population
41
Edge of town
42
1,700 – 2,500 m2
43
44
45
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
48
Klitschko brothers act as brand ambassadors
Fitness First
107
109
101
McFit v Fitness FirstGerman Club Openings
49
0 20 40 60 80 100 120
McFit
83
96
108
Jun-09 Jun-08 Jun-07
Fitness First
279,000
275,000
280,000
McFit v Fitness First Germany 2007-2009
50
0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000
McFit
520,000
630,000
780,000
Jun-09 Jun-08 Jun-07
McFit Financials 2007
Euros(millions)
% turnover
Turnover 86
Staff costs 3.4 3%
51
EBITDA 28 24%
Interest charge 0.1 -
Net assets 34
Clubs 88
358
34
German Market Structure -
Leading brands
(number of clubs)
52
695
Low-cost (budget) Mid-Market Premium
53
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