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Health and Fitness Clubs - UK - October 2009

The UK health and fitness clubs market has hit a sticky patch in the past 18 months, which has seen market growth stall as a result of the combined impact of the banking crisis and associated economic recession. Club openings have slowed to a trickle in all but a few cases as the funding necessary to pursue an aggressive opening programme has dried up and consumers have been cutting back on non-essential items, as their confidence has plummeted amid fears of losing their jobs, mounting debt levels and rounds of pay freezes or pay cuts.

The process of consolidation which was evident when Mintel last reported on the market (in May 2007) has continued, albeit at a much reduced pace. Penetration of health clubs has slowed to a standstill and still remains at a level nearly half that of the much more developed US market. Cost remains a major issue for many consumers and for that reason, the emergence of the budget health clubs sector during the past 18 months is a welcome development which could attract a large tranche of new consumers into the market. Other innovations in the world of gaming, such as the Nintendo Wii, also have the potential to benefit the industry.

This report analyses the current status of the UK health and fitness clubs industry and considers its likely future development, including providing detailed profiles of the major multi-site operators. It also looks at consumer behaviour relating to, and attitudes towards, health and fitness clubs, with a view to identifying market opportunities.

Main issues

  • How has the economic recession impacted on consumer behaviour regarding and attitudes towards health and fitness clubs?

  • How has the recession and banking crisis impacted on the major operators?

  • How are operators going to maintain growth without opening new clubs?

  • Will the ‘no frills’ budget format catch on in the health clubs market?

  • What are the opportunities for operators to expand their businesses in the future?

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Table of contents

  1. Issues in the Market

      • Main issues
        • Definition
          • Abbreviations
          • Future Opportunities

            • Adopting a more holistic approach: providing ‘health solutions’
              • Mintel Inspire
                • Opportunity
                  • Capitalising on rise of digital technology
                    • Mintel Inspire
                      • Opportunity
                        • The eternal paradox
                          • Mintel Inspire
                            • Opportunity
                              • Secrecy does clubs no favours
                                • Opportunity
                                  • Reaching out to the wider community
                                    • Green machines
                                      • Opportunity
                                      • Market in Brief

                                        • Market stalls as club openings and memberships slow
                                          • Secondary revenue growth slows in response to recession
                                            • Consolidation continues albeit at reduced pace
                                              • New budget health clubs sector emerges
                                                • Fitness First and David Lloyd lead the way
                                                  • Traditional advertising playing less of a role
                                                    • Private clubs competing with outdoor and home exercise, public facilities and sports clubs
                                                      • Leisure centre, educational and company gyms all providing stiff competition
                                                        • Trading down and cutting back evident as a result of recession
                                                          • Longer-term outlook positive
                                                          • Internal Market Environment

                                                            • Key points
                                                              • Slim chance of being the right weight
                                                                • Figure 1: Trends in body mass index (BMI) of adults in England, 2001-07
                                                              • Bend it like Beckham…
                                                                • Figure 2: Consumers’ knowledge of how much exercise they should do, compared to government recommendation, 2007
                                                              • Lower-income women face weightier issues
                                                                • Figure 3: Overweight and obesity prevalence, by household income and gender, 2007
                                                              • Childhood obesity on the rise
                                                                • Figure 4: Trends in incidence of overweight or obesity among children aged 2-15, 1997-2007
                                                              • Jogging is a runaway success
                                                                • Figure 5: Trends in participation in sports regularly/occasionally, 2005-09
                                                              • DIY fitness on the up
                                                                • Figure 6: Trends on ownership of sporting equipment, 2005-09
                                                              • Is the Wii the future of home fitness?
                                                                • Traditional sports club model is struggling
                                                                  • Figure 7: Sports clubs consumers belong to, 2005-09
                                                                • Overheads rising inexorably
                                                                  • Outlook for tanning is not sunny
                                                                    • Industry promotes itself
                                                                    • Broader Market Environment

                                                                      • Key points
                                                                        • Falling levels of PDI…
                                                                          • Figure 8: Trends in personal disposable income and consumer expenditure, 2004-14
                                                                        • … reflect weak consumer confidence but both showing signs of recovery
                                                                          • Figure 9: Gfk NOP Consumer Confidence index, May-08-July-09
                                                                        • GDP down but also starting to recover
                                                                          • Figure 10: GDP quarterly percentage change, 2004-09
                                                                        • Population trends good news for operators…
                                                                          • Figure 11: Trends in the age structure of the UK population, by gender, 2004-14
                                                                        • … and numbers of ABC1s rising fast
                                                                          • Figure 12: Forecast adult population trends, by socio-economic group, 2004-14
                                                                          • Figure 13: Forecast adult population trends, by lifestage, 2004-14
                                                                          • Figure 14: UK household sizes, 2004-14
                                                                        • The impact of the recession
                                                                          • Figure 15: Agreement with statements about changes in employment situation in past year, July 2009
                                                                          • Figure 16: Agreement with statements about impact of recession on leisure behaviour, July 2009
                                                                        • Staying healthy seen as more important
                                                                          • Figure 17: Impact of the recession on leisure activities, April 2009
                                                                          • Figure 18: Impact of the recession on usage of private health & fitness clubs and leisure centres, July 2009
                                                                      • Competitive Context

                                                                        • Key points
                                                                          • A major industry competing for a share of discretionary spend
                                                                            • Figure 19: Consumer expenditure on selected leisure goods and activities, 2003-08
                                                                            • Figure 20: Leisure activities participated in, by frequency, July 2009
                                                                          • Consumers across the leisure industry looking for service and value
                                                                            • The US experience
                                                                              • Figure 21: US health and fitness clubs market size, 2004-09
                                                                              • Figure 22: US health and fitness club market size key performance indicators, 2003-09
                                                                          • Strengths and Weaknesses in the Market

                                                                              • Strengths
                                                                                • Weaknesses
                                                                                • Who’s Innovating?

                                                                                  • Key points
                                                                                    • Budget bargains blossom
                                                                                      • Technology driving operational efficiencies…
                                                                                        • … and also opportunities
                                                                                          • Into the home and beyond…
                                                                                          • Market Size and Forecast

                                                                                            • Key points
                                                                                              • An end to the glory days?
                                                                                                • Figure 23: UK health and fitness clubs market size trends, 2004-14
                                                                                              • Most clubs having to work hard to hold on to members…
                                                                                                • … as budget clubs set to boost market
                                                                                                  • Longer-term prospects still good
                                                                                                  • Segment Performance

                                                                                                    • Key points
                                                                                                      • Health and fitness clubs by sector
                                                                                                        • Figure 24: UK health and fitness clubs market, by sector, 2004-08
                                                                                                      • Membership/joining fees recover as discounting and competition eases
                                                                                                        • Figure 25: Trends in membership/admission fees revenue of UK health and fitness clubs, 2004-14
                                                                                                      • Secondary spend slips back
                                                                                                        • Figure 26: Trends in other revenue of UK health and fitness clubs, 2004-14
                                                                                                    • Market Share

                                                                                                      • Key points
                                                                                                        • Leading operators by number of clubs
                                                                                                          • Figure 27: Leading UK health & fitness club operators, by number of clubs, as at October 2009
                                                                                                      • Companies and Products

                                                                                                        • Key points
                                                                                                          • Industry structure
                                                                                                            • Figure 28: Number of private health and fitness clubs in the UK, 2004-09
                                                                                                            • Figure 29: Leading players in the UK private health and fitness clubs market, by brand, October 2009
                                                                                                          • David Lloyd Leisure Operations Holdings Ltd
                                                                                                            • Figure 30: Financial performance of David Lloyd Leisure Ltd, 2005-09
                                                                                                            • Figure 31: Financial performance of Next Generation Clubs Ltd, 2004-09
                                                                                                          • Fitness First Group Ltd
                                                                                                            • Figure 32: Financial performance of Fitness First Clubs Ltd, 2004-08
                                                                                                          • Sales growth slows to a trickle as recession bites
                                                                                                            • Virgin Group Holdings Ltd
                                                                                                                • Figure 33: Financial performance of Virgin Active Group Ltd, 2004-08
                                                                                                              • LA Fitness
                                                                                                                • Figure 34: Financial performance of MOP Acquisitions (LAF) Ltd, 2007/08
                                                                                                              • DW Sports Fitness Ltd
                                                                                                                • Figure 35: Financial performance of DW Sports Fitness Ltd, 2005-09
                                                                                                              • Esporta Group Ltd
                                                                                                                • Figure 36: Financial performance of Esporta Group Ltd, 2004-08
                                                                                                              • Bannatyne Fitness Ltd
                                                                                                                  • Figure 37: Financial performance of Bannatyne Fitness Ltd, 2004-08
                                                                                                                • Nuffield Health
                                                                                                                  • Figure 38: Financial performance of Cannons Health & Fitness Ltd, 2003-07
                                                                                                                • Other operators
                                                                                                                • Brand Elements

                                                                                                                    • Key points
                                                                                                                      • Brand map
                                                                                                                          • Figure 39: Attitudes towards and usage of health and fitness club brands, October 2009
                                                                                                                        • Brand qualities of health and fitness club brands
                                                                                                                          • Fitness First is healthiest
                                                                                                                            • Figure 40: Personalities of various health and fitness club brands, October 2009
                                                                                                                          • Experience of health and fitness club brands
                                                                                                                            • Fitness First most popular, LA Fitness lacking appeal?
                                                                                                                              • Figure 41: Consumer usage of various health and fitness club brands, October 2009
                                                                                                                            • Brand intentions for health and fitness club brands
                                                                                                                              • Virgin most considered, David Lloyd not for everyone
                                                                                                                                • Figure 42: Consideration of various health and fitness club brands, October 2009
                                                                                                                              • Brand satisfaction for health and fitness club brands
                                                                                                                                • Fitness First most excellent, David Lloyd best overall
                                                                                                                                  • Figure 43: Satisfaction with various health and fitness club brands, October 2009
                                                                                                                                • Brand commitment to health and fitness club brands
                                                                                                                                  • Fitness First and Virgin have highest loyalty
                                                                                                                                    • Figure 44: Commitment to various health and fitness club brands, October 2009
                                                                                                                                  • David Lloyd
                                                                                                                                    • What the consumer thinks
                                                                                                                                      • Figure 45: Attitudes towards the David Lloyd brand, October 2009
                                                                                                                                    • LA Fitness
                                                                                                                                      • What the consumer thinks
                                                                                                                                        • Figure 46: Attitudes towards the LA Fitness brand, October 2009
                                                                                                                                      • Bannatyne’s Health Club
                                                                                                                                        • What the consumer thinks
                                                                                                                                          • Figure 47: Attitudes towards the Bannatyne’s Health Club brand, October 2009
                                                                                                                                        • Nuffield Health Fitness & Wellbeing
                                                                                                                                          • What the consumer thinks
                                                                                                                                            • Figure 48: Attitudes towards the Nuffield Health Fitness & Wellbeing brand, October 2009
                                                                                                                                          • Esporta
                                                                                                                                            • What the consumer thinks
                                                                                                                                              • Figure 49: Attitudes towards the Esporta brand, October 2009
                                                                                                                                            • Virgin Active
                                                                                                                                              • What the consumer thinks
                                                                                                                                                • Figure 50: Attitudes towards the Virgin Active brand, October 2009
                                                                                                                                              • Fitness First
                                                                                                                                                • What the consumer thinks
                                                                                                                                                  • Figure 51: Attitudes towards the Fitness First brand, October 2009
                                                                                                                                              • Brand Communication and Promotion

                                                                                                                                                • Key points
                                                                                                                                                  • Adspend dips as operators switch spend to below-the-line
                                                                                                                                                    • Figure 52: Trends in advertising expenditure for health and fitness clubs, 2005-09*
                                                                                                                                                  • Virgin leads the pack
                                                                                                                                                    • Figure 53: Advertising expenditure for health and fitness clubs, by operator, 2005-08
                                                                                                                                                  • January the key month for advertising activity
                                                                                                                                                    • Figure 54: Advertising expenditure for health and fitness clubs, by month, 2008
                                                                                                                                                  • Fitness First gets into texts
                                                                                                                                                    • Clubs use membership and joining fees as promotional tools
                                                                                                                                                      • Join online not in clubs
                                                                                                                                                        • Using technology to enhance relationships with members
                                                                                                                                                          • Referrals still very important
                                                                                                                                                            • Having no contracts becomes a selling point
                                                                                                                                                            • Which Type of Gym or Health Club Do People Currently Use?

                                                                                                                                                              • Key points
                                                                                                                                                                • Figure 55: Type of gym/health club currently used, July 2009
                                                                                                                                                                • Figure 56: Type of gym/health club used, by type of membership/payment, July 2009
                                                                                                                                                            • What Effect is The Credit Crunch Having on Exercise Habits?

                                                                                                                                                              • Key points
                                                                                                                                                                • Figure 57: Most popular effect of credit crunch on exercise habits, July 2009
                                                                                                                                                              • Middle-aged and self-employed go their own way
                                                                                                                                                                • The cancellation kids
                                                                                                                                                                  • Men go into extra time with football
                                                                                                                                                                    • Don’t mention the pub
                                                                                                                                                                      • Group tactics
                                                                                                                                                                        • Figure 58: Effect of credit crunch on exercise habits, by type of gym/health club and membership/payment, July 2009
                                                                                                                                                                    • Attitudes Towards Private Health and Fitness Clubs and Gyms in Public Leisure Centres

                                                                                                                                                                      • Key points
                                                                                                                                                                        • Figure 59: Attitudes towards private health and fitness clubs or gyms in public leisure centres, July 2009
                                                                                                                                                                      • Convenience is king
                                                                                                                                                                        • Women into convenience and changing rooms
                                                                                                                                                                          • Students say the price must be right
                                                                                                                                                                            • Figure 60: Attitudes towards private health and fitness clubs or gyms in public leisure centres, by type of gym/health club and membership/payment, July 2009
                                                                                                                                                                        • What Do People Think About Going to Gyms/Health and Fitness Clubs?

                                                                                                                                                                          • Key points
                                                                                                                                                                            • Figure 61: Statements on going to gyms/health and fitness clubs, July 2009
                                                                                                                                                                          • It’s official – gyms are boring
                                                                                                                                                                            • Mid-lifers hardest to please
                                                                                                                                                                              • With a little help from my friends
                                                                                                                                                                                  • Figure 62: Statements on going to gyms/health and fitness clubs, by type of gym/health club used, July 2009
                                                                                                                                                                              • Appendix – Type of Gym/Health Club Used

                                                                                                                                                                                  • Figure 63: Type of gym/health club used (paying monthly membership/subscription), by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 64: Type of gym/health club used (pay-as-you-go payments), by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 65: Type of gym/health club used (use it for free), by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 66: Type of gym/health club used (lapsed members who used to use), by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 67: Type of gym/health club used (all who have never used), by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 68: Private club users’ other gym usage, July 2009
                                                                                                                                                                              • Appendix – What Effect is The Credit Crunch Having on Exercise Habits?

                                                                                                                                                                                  • Figure 69: Most significant effect of credit crunch (have done) on exercise habits, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 70: Next most significant effect of credit crunch (have done) on exercise habits, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 71: Most significant effect of credit crunch (planning to do) on exercise habits, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 72: Next most significant effect of credit crunch (planning to do) on exercise habits, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 73: Most significant effect of credit crunch on exercise habits (have done), by effect of credit crunch on exercise habits, July 2009
                                                                                                                                                                                  • Figure 74: Next most significant effect of credit crunch on exercise habits (have done), by effect of credit crunch on exercise habits, July 2009
                                                                                                                                                                                  • Figure 75: Most significant effect of credit crunch on exercise habits (planning to do), by effect of credit crunch on exercise habits, July 2009
                                                                                                                                                                                  • Figure 76: Next most significant effect of credit crunch on exercise habits (planning to do), by effect of credit crunch on exercise habits, July 2009
                                                                                                                                                                              • Appendix – Attitudes Towards Private Health and Fitness Clubs and Gyms in Public Leisure Centres

                                                                                                                                                                                  • Figure 77: Most popular statements on use of private health and fitness clubs or gyms in public leisure centres, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 78: Next most popular statements on use of private health and fitness clubs or gyms in public leisure centres, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 79: Least popular statements on use of private health and fitness clubs or gyms in public leisure centres, by demographic sub-group, July 2009
                                                                                                                                                                              • Appendix – What Do People Think About Going to Gyms/Health and Fitness Clubs?

                                                                                                                                                                                  • Figure 80: Most popular statements on going to gyms/health and fitness clubs, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 81: Next most popular statements on going to gyms/health and fitness clubs, by demographic sub-group, July 2009
                                                                                                                                                                                  • Figure 82: Least popular statements on going to gyms/health and fitness clubs, by demographic sub-group, July 2009

                                                                                                                                                                              Companies Covered

                                                                                                                                                                              • Aldi Stores Ltd (UK & Ireland)
                                                                                                                                                                              • Amazon.co.uk
                                                                                                                                                                              • Apple Retail UK
                                                                                                                                                                              • Argos
                                                                                                                                                                              • Asda Group Ltd
                                                                                                                                                                              • ASOS
                                                                                                                                                                              • Bannatyne's Health Club
                                                                                                                                                                              • BC Partners Ltd
                                                                                                                                                                              • British Market Research Bureau (BMRB)
                                                                                                                                                                              • British Phonographic Industry Ltd (The) [BPI]
                                                                                                                                                                              • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                                                                              • British Video Association (BVA)
                                                                                                                                                                              • Cancer Research UK
                                                                                                                                                                              • Cannons Health and Fitness Ltd
                                                                                                                                                                              • Chester Zoo
                                                                                                                                                                              • Co-operative Group
                                                                                                                                                                              • David Lloyd Leisure
                                                                                                                                                                              • De Vere Group PLC
                                                                                                                                                                              • Dragons Health Clubs
                                                                                                                                                                              • Electronic Arts, Inc
                                                                                                                                                                              • ELSPA
                                                                                                                                                                              • Esporta
                                                                                                                                                                              • Facebook, Inc.
                                                                                                                                                                              • Fiserv, Inc.
                                                                                                                                                                              • Fitness Exchange
                                                                                                                                                                              • Fitness First Plc
                                                                                                                                                                              • Fitness Industry Association
                                                                                                                                                                              • Freeview
                                                                                                                                                                              • Gfk NOP
                                                                                                                                                                              • Government Actuary's Department (GAD)
                                                                                                                                                                              • Greens Health & Fitness
                                                                                                                                                                              • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                                                              • Hilton Hotels Corporation
                                                                                                                                                                              • International Health, Racquet & Sportsclub Association (IHRSA)
                                                                                                                                                                              • J. Sainsbury
                                                                                                                                                                              • JJB Sports Plc
                                                                                                                                                                              • Kingfisher UK & Ireland
                                                                                                                                                                              • LA Fitness PLC
                                                                                                                                                                              • Legal & General Group PLC
                                                                                                                                                                              • Lidl (UK)
                                                                                                                                                                              • LivingWell
                                                                                                                                                                              • London Aquarium
                                                                                                                                                                              • London Zoo
                                                                                                                                                                              • Marks & Spencer
                                                                                                                                                                              • MidOcean Partners
                                                                                                                                                                              • Mike Corby Holdings Ltd
                                                                                                                                                                              • mmO2 plc
                                                                                                                                                                              • MySpace.com
                                                                                                                                                                              • Netto Foodstores Ltd
                                                                                                                                                                              • Nintendo UK Entertainment Ltd
                                                                                                                                                                              • Office for National Statistics
                                                                                                                                                                              • Permira Advisers Ltd
                                                                                                                                                                              • Premier Travel Inn
                                                                                                                                                                              • Prezzo PLC
                                                                                                                                                                              • Royal Automobile Club
                                                                                                                                                                              • Ryanair Holdings plc
                                                                                                                                                                              • Shokk
                                                                                                                                                                              • Société Générale Group
                                                                                                                                                                              • Superdrug Stores Plc
                                                                                                                                                                              • Tesco Plc
                                                                                                                                                                              • The Society of London Theatre [SOLT]
                                                                                                                                                                              • Thomas Cook Group PLC
                                                                                                                                                                              • Twitter, Inc.
                                                                                                                                                                              • Ubisoft
                                                                                                                                                                              • Virgin Active
                                                                                                                                                                              • Virgin Group Ltd.
                                                                                                                                                                              • Waitrose
                                                                                                                                                                              • Whitbread PLC
                                                                                                                                                                              • Wm Morrison Supermarkets
                                                                                                                                                                              • World Health Organization

                                                                                                                                                                              Health and Fitness Clubs - UK - October 2009

                                                                                                                                                                              £1,995.00 (Excl.Tax)