The booming budget fitness sector has resulted in clear market polarisation over recent years. Health club operators have increasingly chosen to align themselves with the low-cost or premium ends of the market, rather than sitting in the previously popular mid-market sector. It seems, however, that this space is being reinvigorated by entrepreneurial independent operators – operators that are keen to create an affordable and personalised experience for a potentially large audience of customers.
With concepts based on strength and conditioning, specialist sports advice, solid equipment and expert advice, but without a prohibitive price tag, these operators are proud to call themselves mid-market. They know and value each of their members and are focused on retention, rather than acquisition. And since they are independent operators, they’re setting up shop all over the country instead of targeting big cities only.
Does this trend signal that a shift in the current market make-up is on its way? We asked the industry experts.
Surrounded by budget gyms in Glasgow city centre, we deliberately chose to create a mid-market offering that focused on affordability, good kit, a welcoming environment and excellent customer service. We wanted to create a community and make all our members feel they're valued.
There is definitely a gap in the mid-market and I think independent clubs are better placed to fill it than chains. We have full control over our decisions and we can respond to member requests immediately. We also have more freedom to interact in a more personable way on social media, which is really important at a local level. At The Club, we work with local businesses to offer cross-promotions, such as a pop-up barbers, which beds us into the community.
As well as looking after our members, we have the freedom to look after our staff well. We’re one of the few facilities in the area that pays staff for shifts and lets them keep 100 per cent of their PT earnings. Going forward, I think we will see more independent operators come into the mid-market, and a real demand for their service.
"There is definitely a gap in the mid-market and independent clubs are better placed to fill it than chains"
The Club, which boasts its own in-house DJ, focuses on offering quality equipment and good customer service at an affordable price point
Rachelle SolanCo-ownerSolan Fitness
Rachelle Solan
Targeting the mid-market was intentional for Solan Fitness. We didn’t want to be budget and we couldn’t go high-end because we didn’t have a spa. Our core values are strength and functional training in a boutique environment, and a hands-on approach to our customers – at a mid-market price.
We experience a lot of demand at our two clubs: the mid-market is a massive space that no one is currently dominating. The budget clubs have helped create a new mid-market audience as they're excellent gyms for introducing people to fitness. However, people plateau after a while and begin to look for more expert advice and attention to achieve better results. It’s at this point that they're happy to invest in themselves and trade up to a mid-market club.
It’s not just former budget gym members that come to us. We also attract spa and racquet club users who no longer want to pay premium prices for facilities they don’t have time to use.
But it’s true that independents remain limited by their inability to scale up. They get stuck at two or three clubs that need the personality, passion and energy of the owner to thrive. This is why we’ve chosen to launch a Solan Fitness franchise. We’re systemising our approach and making cookie-cutters of ourselves, so lots of Solan Fitness clubs will all offer the same quality experience, but in a slightly different environment. We expect to have 15 clubs open by the end of 2018.
"Independents remain limited by their inability to scale up. They get stuck at two or three clubs that need the personality, passion and energy of the owner to thrive"
Strength and functional training are key offerings at Solan Fitness
Stephen TharrettCo-founderClubIntel:
Stephen Tharrett
Independents have always dominated the mid-market in the US; the big players didn’t evolve until much later. While some marginal mid-market clubs were chewed up by the club chains, the established ones withstood the threat.
There are a lot of successful mid-market players with a handful of clubs in the US. Their qualities are similar to boutiques in that they’re local, tribal and build trust, but with the benefit of a lower price point.
An additional strength of the independents is their ability to be agile. Having no head office means they can quickly respond to change without having to verify their decisions with external management. Staff also tend to prefer working for them as they often offer higher salaries and a better culture than the chains.
On the other hand, independent mid-market clubs have less access to capital than the chains, which can be a huge disadvantage. And if they’ve been around for a long time, they can become complacent – assuming everyone knows them and thinking there is no need to tell their story. Or they run into trouble because they don’t have a distinct brand personality or ethos.
Despite the advantages, the mid-market remains a shrinking sector because it’s vulnerable to competition from budget and premium clubs. Although independent mid-market clubs will continue to thrive, I believe that they are too small scale to create massive growth.
"An additional strength of the independents is their ability to be agile and quickly respond to change"
Sol GilbertCo-ownerUnderground Gym
Sol Gilbert
Our clubs have grown out of a combat school and both offer the same concept: combat training, strength and conditioning, and functional training in a very personal environment.
We positioned ourselves in the mid-market because we wanted to be as inclusive as possible. We’re in a price-sensitive location and we didn’t want to accidentally create the type of elitist facility that high prices can encourage. The day may start with CEOs arriving in their Rolls Royces, but we also have many students and other people who don’t have high levels of disposable income.
People like the variety we offer and the results we help them to achieve. Our focus is firmly on retention, not acquisition. In fact, we recently capped our membership and are running a waiting list, because we want to be able to properly service the needs of all of our members and get them to their goals.
Our experience shows that independents can use the opportunities the mid-market presents to set themselves apart from the club chains.
"We’re in a price-sensitive location and we didn’t want to accidentally create the type of elitist facility that high prices can encourage"
Underground Gym's concept grew from a combat school
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The booming budget fitness sector has resulted in clear market polarisation over recent years. Health club operators have increasingly chosen to align themselves with the low-cost or premium ends of the market, rather than sitting in the previously popular mid-market sector. It seems, however, that this space is being reinvigorated by entrepreneurial independent operators – operators that are keen to create an affordable and personalised experience for a potentially large audience of customers.
With concepts based on strength and conditioning, specialist sports advice, solid equipment and expert advice, but without a prohibitive price tag, these operators are proud to call themselves mid-market. They know and value each of their members and are focused on retention, rather than acquisition. And since they are independent operators, they’re setting up shop all over the country instead of targeting big cities only.
Does this trend signal that a shift in the current market make-up is on its way? We asked the industry experts.
Surrounded by budget gyms in Glasgow city centre, we deliberately chose to create a mid-market offering that focused on affordability, good kit, a welcoming environment and excellent customer service. We wanted to create a community and make all our members feel they're valued.
There is definitely a gap in the mid-market and I think independent clubs are better placed to fill it than chains. We have full control over our decisions and we can respond to member requests immediately. We also have more freedom to interact in a more personable way on social media, which is really important at a local level. At The Club, we work with local businesses to offer cross-promotions, such as a pop-up barbers, which beds us into the community.
As well as looking after our members, we have the freedom to look after our staff well. We’re one of the few facilities in the area that pays staff for shifts and lets them keep 100 per cent of their PT earnings. Going forward, I think we will see more independent operators come into the mid-market, and a real demand for their service.
"There is definitely a gap in the mid-market and independent clubs are better placed to fill it than chains"
The Club, which boasts its own in-house DJ, focuses on offering quality equipment and good customer service at an affordable price point
Rachelle SolanCo-ownerSolan Fitness
Rachelle Solan
Targeting the mid-market was intentional for Solan Fitness. We didn’t want to be budget and we couldn’t go high-end because we didn’t have a spa. Our core values are strength and functional training in a boutique environment, and a hands-on approach to our customers – at a mid-market price.
We experience a lot of demand at our two clubs: the mid-market is a massive space that no one is currently dominating. The budget clubs have helped create a new mid-market audience as they're excellent gyms for introducing people to fitness. However, people plateau after a while and begin to look for more expert advice and attention to achieve better results. It’s at this point that they're happy to invest in themselves and trade up to a mid-market club.
It’s not just former budget gym members that come to us. We also attract spa and racquet club users who no longer want to pay premium prices for facilities they don’t have time to use.
But it’s true that independents remain limited by their inability to scale up. They get stuck at two or three clubs that need the personality, passion and energy of the owner to thrive. This is why we’ve chosen to launch a Solan Fitness franchise. We’re systemising our approach and making cookie-cutters of ourselves, so lots of Solan Fitness clubs will all offer the same quality experience, but in a slightly different environment. We expect to have 15 clubs open by the end of 2018.
"Independents remain limited by their inability to scale up. They get stuck at two or three clubs that need the personality, passion and energy of the owner to thrive"
Strength and functional training are key offerings at Solan Fitness
Stephen TharrettCo-founderClubIntel:
Stephen Tharrett
Independents have always dominated the mid-market in the US; the big players didn’t evolve until much later. While some marginal mid-market clubs were chewed up by the club chains, the established ones withstood the threat.
There are a lot of successful mid-market players with a handful of clubs in the US. Their qualities are similar to boutiques in that they’re local, tribal and build trust, but with the benefit of a lower price point.
An additional strength of the independents is their ability to be agile. Having no head office means they can quickly respond to change without having to verify their decisions with external management. Staff also tend to prefer working for them as they often offer higher salaries and a better culture than the chains.
On the other hand, independent mid-market clubs have less access to capital than the chains, which can be a huge disadvantage. And if they’ve been around for a long time, they can become complacent – assuming everyone knows them and thinking there is no need to tell their story. Or they run into trouble because they don’t have a distinct brand personality or ethos.
Despite the advantages, the mid-market remains a shrinking sector because it’s vulnerable to competition from budget and premium clubs. Although independent mid-market clubs will continue to thrive, I believe that they are too small scale to create massive growth.
"An additional strength of the independents is their ability to be agile and quickly respond to change"
Sol GilbertCo-ownerUnderground Gym
Sol Gilbert
Our clubs have grown out of a combat school and both offer the same concept: combat training, strength and conditioning, and functional training in a very personal environment.
We positioned ourselves in the mid-market because we wanted to be as inclusive as possible. We’re in a price-sensitive location and we didn’t want to accidentally create the type of elitist facility that high prices can encourage. The day may start with CEOs arriving in their Rolls Royces, but we also have many students and other people who don’t have high levels of disposable income.
People like the variety we offer and the results we help them to achieve. Our focus is firmly on retention, not acquisition. In fact, we recently capped our membership and are running a waiting list, because we want to be able to properly service the needs of all of our members and get them to their goals.
Our experience shows that independents can use the opportunities the mid-market presents to set themselves apart from the club chains.
"We’re in a price-sensitive location and we didn’t want to accidentally create the type of elitist facility that high prices can encourage"
Underground Gym's concept grew from a combat school
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