This month David Minton introduces the new economic barometer for our industry - The Fitness Index
I first used the term Fitness Index in an article I wrote in the early 90’s, when the country was deep in its last recession. It was a frivolous attempt to use the (then) growth of the fitness industry to act as one of the barometers of economic activity.
My thinking was that along with lipstick and chocolate, consumption of fitness activities grew when times are hard. Encouraging people to look good in difficult times is tried and tested but instruments to measure the increase in participation were not developed like sales figures for other treats.
Sixteen years later, during the first month of the so called credit crunch, I resurrected the Fitness Index as a way of fending off questions from the media-at-large looking for a negative story. The number of members, facilities and overall market value had grown since the 90s and was still growing, albeit more slowly. One year on, when the credit crunch tipped over into a recession the Fitness Index was showing that growth was still there - but now we could measure it.
So now, whilst we’re in the worst banking crisis since the 1930s, when the Bank of England sees mixed evidence on the impact of quantitative easing – a process that has so far pumped £150bn (in cash) into the economy - the Fitness Index is being adopted as a useful indicator.
The Fitness Industry has not gone cap in hand to the Government, like so many industries, but has instead been developing partnerships that matter and are working to improve customer service and retention. Some partnerships are proving more productive than others. The NHS, Change for Life campaign is an excellent example of how people’s behaviour can be nudged, slowly, towards better choices. This campaign has been adopted to enhance local initiatives that link health and some form of activity.
And it’s not just the NHS who has been keen to forge links with our industry; private hospitals and health insurers are there too. Nuffield purchased and refocused Cannons, BUPA developed, with David Lloyd the Core Exercise Clinic, plus with Fitness First the BUPA Health Checks now rolled out across all sites. PruHealth has been rewarding around 200,000 policy holders for engaging in healthy behaviour. Now Nuffield is the largest not-for-profit independent health care provider, BUPA had a turnover of £5.87bn last year and PruHealth has seen dramatic growth since its launch in 2004.
Many in the public sector have embraced their local PCT and its money to deliver GP referral schemes, Swim for Free and Healthy Heart initiatives to name but three. Some councils have built on this initial interest to target incentives to those that need it most, understanding in the process some of those barriers preventing participation.
It seems many of those who are participating are now viewing exercise as an investment, possibly the best sort of investment in a recession. Yes, health is being seen as an enduring value and one to work on. So now the fitness industry has embraced the health care business the time line is changing from quick fix to long term care so maybe the vocabulary should become more caring too. Let’s talk of ‘care pathway’ instead of gym induction, ‘quality time with core experts’ instead of your PT, and ‘support and recovering health’ instead of your programme. These new phrases, of course, are there to support the majority who go to the gym, not the minority who are already self motivated. In supporting the majority think how the fitness product will change.
I won’t go so far as to say we’ve reached a tipping point, as that is still some way off, but a favourite phrase of private equity is ‘we have traction’. The accumulated figures from the Fitness Index for 2009 show that, on a like-for-like basis, membership numbers have grown by 0.82% and the total market value has grown by £108m to £3.7 billon. The number of new sites opened between April 2008 and March 2009 was 114 which expanded the membership base by 118,978, a number which will continue to grow as each club matures. Many public and private sites have not only registered like-for-like increases in memberships and income but have also seen the number of ‘active’ members growing too. Yes, footfall has increased in an economic downturn.
Public and private sector brands that are strong in this current climate should utilise the moment to gain market share. Indeed, many are seeing the downturn as an opportunity and rather than think retrenchment, strong operators see sustainable expansion. With around 88% of the total population not involved in the fitness industry I can see the Fitness Index will continue to grow.
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