The gym industry in the UK continues to grow with a new report published in 2018 estimating that one person in seven in the UK has a gym membership of one form or another.
The sector is always evolving. One feature is the rise of the low-cost budget gym chains, extensive use of pay as you go as a pricing tool and the rapid expansion of alternatives such as CrossFit, boxing and kick-boxing clubs and franchises, outdoor endurance events such as Tough-Mudder and regular Park runs. We must also consider the increasing per capita spend on individual fitness equipment and apps which provide in many cases a viable substitute for gym membership.
Despite the presence of several large players, there are still many small independent gyms operating. However, mergers and acquisitions have occurred, indicating that the structure of the industry is changing and perhaps evolving from monopolistic competition towards (in some segments) an oligopoly. In both of these forms of non-price competition, the strength of non-price competition is vital in attracting and maintaining membership.
An important shift in the gym sector in the UK is that there are now many more budget or low-cost clubs available to people who was an affordable membership – perhaps because they are on tight monthly budgets. These clubs do not offer the full bells and whistles associated with (luxury) premium health facilities but often they target time-scarce people looking to work out before work, in the evenings or at weekends. Budget gyms have become increasingly expert in using dynamic pricing strategies.
Dynamic pricing is a pricing strategy in which businesses set flexible prices for products or services based on current market demands.
The aim of dynamic pricing is to allow a business that sells goods or services online and/or via mobile apps to adjust selling prices on the fly in response to changing market demand.
These "dynamic" pricing changes are done automatically by software agents that gather data and use algorithms to adjust pricing according to business rules.
These dynamic pricing rules will often take into account factors such as
Examples of price competition in the gym industry
Examples of non-price competition in the gym industry
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