The Gym Group has announced it will be raising its prices for all customers as a result of soaring energy costs – and other gyms may be following suit.
The company said price increases would be rolled out this year as it dealt with £2m hike in its utility bills.
It did not reveal how much its prices will increase by, but currently, memberships are available from £15.99 a month across its 203 gyms.
Inflationary pressures are having an impact on its operating cost base, which is expected to rise by between four and six per cent. The firm expects these costs will be offset by the price hikes as of 2023.
Richard Darwin, chief executive officer of The Gym Group, said: “We are confident that our high margin, low-cost business model and our yield optimisation strategy will help to mitigate the impacts of the current inflationary environment.
“Our pace of change is accelerating through the launch of a new technology platform and a brand transformation in 2022 as we position our business to take advantage of the many growth opportunities within the low-cost gym market.”
Susannah Streeter, senior investment and markets analyst at asset managers Hargreaves Lansdown, said the company had been left with little choice but to push up prices for customers.
However, it was likely the company will limit the hikes as much as possible to keep its status as a valuable provider. “It’s difficult to put a figure on it but it seems in light of the bills it is facing, a rise of a few pounds a month is to be expected,” Ms Streeter said.
“It is highly likely that other gyms will be forced to follow suit given the sharp rise in energy costs. The businesses are considerably energy intensive given the rows of fitness machines to operate, showers to power and lights needing to be kept on in studios.”
Will other gyms also be increasing their prices?
Other gyms have hinted at potential price rises. Mark Sesnan, chief executive of Greenwich Leisure Limited (GLL), which trades under the Better Fitness and Leisure brand, said energy costs were affecting his company’s operations.
They are having a particularly big effect on its swimming pools, which use up a lot of resources. he said. “Already every time someone swims in a public swimming pool they are subsidised by at least £5 on average.”
Spiralling energy costs are a ticking timebomb for the leisure industry, added Mr Sesnan. “In the past, bulk buying our energy and advanced purchasing helped us protect our business from the worst of these spikes, but there will come a point very soon when energy price rises will have to be passed on to customers.”
GLL is a non-profit social enterprise which runs more than 250 leisure facilities and libraries on behalf of local authorities across the UK. Mr Sesnan said it was crunch time for the brand, and it would need direct financial support from the Government if it is to keep swimming affordable.
Neil Randall, chief executive at Anytime Fitness UK, said its clubs were individually owned by franchisees, with any price hikes being at their own discretion.
However, he said the clubs would be doing what they could to offset the rising operational and energy costs to minimise any impact on members.
He said: “Our local ownership and community feel are hugely important to our members and they will appreciate that any necessary price increases won’t be a decision that’s been taken lightly by our owners and will be to ensure the continued operation and success of their club.”
Do you have a reader query, concern or a financial issue you want addressed? Contact: C.Coombe-Whitlock@inews.co.uk