Gym Group Finally Profitable Again Post-COVID

Sometimes you have to go for a slow burn.

London-based gym chain The Gym Group announced on Wednesday that in the first six months of this year, it swung back to a profit for the first time since 2019. Crucially, the company was able to raise prices and gym bunnies were willing to pony up, even as life became less affordable overall.

Pumping Profits

Gyms took a beating as the world sprung back into shape post-lockdown, with many consumers now kitted out with at-home training equipment. Not even workout-from-home fitness brands were necessarily spared: Lockdown PE poster child Peloton is just now starting to dig itself out of a revenue–growth hole.

The Gym Group specializes in low-budget gyms, and according to its CEO this was the key to its success. Even though The Gym Group and PureGym — its biggest budget rival in the UK — raised prices, they were still the cheapest options for cash-strapped consumers:

• According to a PwC report, the actual penetration of gyms and fitness clubs in the UK has not yet rebounded to pre-2020 levels, but the size of the market is bigger than ever thanks to gyms raising membership prices to offset inflation.
• The same report said the low-cost end of the gym spectrum had more than doubled its market share in the last 10 years, now accounting for 19%.

Young Guns: A McKinsey report from the beginning of this year suggests that gyms can cash in on the younger generations. Millennials and Gen Z spend more on fitness and value it more highly than their elders, according to McKinsey’s data. McKinsey also found that in-person fitness classes and personal training were significant growth areas for the fitness sector.