Organic Growth Strategies for Success - Low-Cost… | tutor2u Business

Organic Growth Strategies for Success - Low-Cost Focus Pays for Pure Gym

In just six years, low-cost gym operator has grown from a start-up in Leeds to becoming the UK's leading gym operator with over 500,000 members. This is a stunning example of how a low-cost, strategy of focus can win in a highly competitive and fragmented market.

We featured the Pure Gym concept in our BUSS1 exam coaching workshops a few years ago - and how quickly they have expanded based on the same customer proposition they had as a start-up. Like other low-cost operators in markets such as short-haul flying and hotels, Pure Gym and their low-cost competitors have taken the frills and complexities out of gym membership.

The Pure Gym customer proposition is simple:

  • Always open (24 hours)
  • No contract
  • Day-passes
  • Membership all managed online (no personal selling at the gym)
  • Free classes
  • Extensive range of exercise equipment, but no pools, saunas etc
This video highlights the set up at a new Pure Gym in Liverpool

With over 500,000 members, Pure Gym now claims to be the largest operator of gym memberships in the UK. It currently has 91 24-hour gyms across the UK with plans to open 30-40 more in 2015. In 2014 it made a pre-tax profit of £10m.

To put this into perspective, the total UK gym market has around 6,000 locations and approximately 7 million memberships. So Pure Gym's market share of the overall market is relatively low. Of course, it the market share is much higher in the low-cost or budget segment.

There seems to be plenty of potential for further growth in the market. In the US, where there is much wider availability of low-cost gym services because of the greater supply of suitable low-cost space, 20% of the adult population attend gyms. In the UK just 12% of adults attend a gym.

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