Why ‘low-cost’ budget gyms are dominating the fitness sector

It is no secret that over the past couple of years there has been a revolution going on in the fitness sector in the form of low-cost budget gyms, and ever since I started working at Bdaily, I’ve noticed that the growth of the budget gym market shows no signs of slowing down.

As it is clear that the ‘low-cost’ approach to operating a gym is dominating the UK’s fitness industry, the future of premium, mid-market gym chains, such as Fitness First and Anytime Fitness is as uncertain as ever.

Spearheading this revolution is Leeds-based Pure Gym, which reported a significant increase in both revenue and profitability in its financial results this past March. The gym chain saw an increase of 49% in revenue to £68.6m, compared with £46m in 2013, while underlying profits also rose by 58% to £22.6m. Furthermore, in terms of pre-tax profit, Pure Gym’s profits grew by 365% to £10m, rising from 2013’s £2.2m.

Due to this success, in May Pure Gym was able acquire LA Fitness and its entire 43 fitness clubs - a deal that will substantially increase the number affordable gyms across Britain.

Pure Gym is now in the process of converting and refurbishing most of the LA Fitness sites, and providing its existing 123,000 members with access to a growing nationwide network of over 130 gyms.

In addition to the acquisition of LA Fitness, the budget gym chain hopes to further expand with the opening of 30 or so more gyms by end of year, adding to its current 98 sites.

Another West Yorkshire budget gym, Xercise4Less, has also seen growth in recent months, culminating inthe opening of a new £1m facility in the centre of Bradford. Scheduled to be up and running this August, the new site will be the sixth Xercise4Less gym to open in Yorkshire in just over two years, bringing the chain’s total investment across the region to £6m. Spanning over 29,850 sq ft, the city centre gym will provide a boost to the local economy with the creation of 40 new jobs.

Referred to as ‘the people’s gym’, Xercise4Less’s portfolio now includes 28 gyms across the UK with 210,000 members and is set to launch up to 30 more gyms by the end of the year. The chain operates across the UK in regions including the North East, Yorkshire, North West and the Midlands.

As well as the ‘low-cost’ gyms, Bdaily showcased a very unique Leeds-based gymwhere the more its members exercise the less they pay due to a results-based reward scheme. Members of Primal Gym are given upto £10 off each month when they achieve their fitness targets via a clear goal-setting points system.

Obviously the rise of the low-cost budget gym is due to the minimal financial cost, and why would anyone pay £60 or £70 a month for gym membership when they can join a budget gym for just £15 - £25?

But as the budget market keeps growing, we can only assume that premium gyms are preparing a response to keep existing customers while attracting new members. So the only question that remains is…who will survive?