SIBEC REVIEW
QUESTION TIME
SIBEC Europe in Madeira opened with an industry debate. Chaired by editor of Health Club Management Kate Cracknell, the discussion covered wearable tech and Sports Direct’s £5 memberships
Kate Cracknell (KC): Sports Direct has announced that it will be offering gym memberships for £5 a month. What impact might this have on the rest of the market?
JG: It’s diffi cult to comment until we see whether £5 really is the new low-cost price fl oor, or if it’s a pre- sale marketing tactic. If Sports Direct really is offering memberships for £5, then the mid-market bracket has been redefi ned again. It’s impossible to make a profi t
charging £5 a month, so this would clearly be a loss leader to drive retail sales. A key challenge will be fi nding quality staff who are happy to work for a loss-leading product. DW: This could redefi ne what we consider affordable fi tness. A few years ago that space was occupied by Fitness First and LA fi tness. In the US, Planet Fitness has 838 clubs and 4 million members enjoying memberships as low as US$5 a month. If anything, this Sports Direct play could be a fantastic marketing ploy from Mike Ashley, who is looking to make waves in the industry.
L-R: Graham, HCM editor and panel chair Kate Cracknell, Leonie, Vesey and Wright
MEET THE PANEL Jim Graham (JG)
COO, The Gym Group
Sarah Leonie (SL) Group fi tness manager, Places for People Leisure (PfPL) Diane Vesey (DV) Director of European operations, Anytime Fitness Dave Wright (DW) CEO, CFM and MYZONE
KC to SL: Would you consider competing on cost? SL: Half of our centres now offer gym- only membership and can be reactive on price when low-cost competition opens up on the doorstep. That said, we recognise the need to differentiate our product from the budget clubs. We’re family orientated and
offer much more than just gym and classes. We operate with the wider view of being perfectly placed in the community and able to respond to the health agenda. Rather than go head to head, our plan is to differentiate and not just drop prices. We need to focus on our services and be confi dent in our strategy. We certainly won’t be throwing all that away to compete with a £5 membership. DV: You could take the view that anything that gets more people engaged in exercise is a good thing. But I would question, for this price, what the member experience will be like, the service levels and so on. Tara Dillon (fl oor): The whole sector needs to stop acting like a shop – we’re selling fi tness on the cheap, but
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ultimately you get what you pay for and I don’t think it will work. As a sector we’re diversifying, but
we need to do more if we’re to expand from the 13 per cent of the population who currently go to the gym. We need to look at the health agenda and consider how we can truly make an impact. We need to grow up as a sector and take ourselves seriously. SL: My concern is the quality of service people will receive in these budget clubs. If they haven’t been to a gym before and have never used equipment, and they join a gym for a short amount of time with no interaction, will we lose them forever? JG: When I joined the sector, the one thing that really surprised me was the lack of understanding that we’re in the hospitality and service industry. We put relatively low-paid staff in front of customers, many of whom would rather not be buying the product, fi nd it painful to consume and fi nd the environment intimidating. It’s a complex emotional situation – and that means we need to work even harder to deliver good service. Robin Gargrave (fl oor): A gym in a retail store with very low prices could
January 2015 © Cybertrek 2015
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