Report to Scrutiny Committee on 26th January 2011
Comparison to Private Sector Pricing
1. Background
Local Authorities and private sector leisure providers have traditionally offered very different “products” due to their rationale and target markets being correspondingly very different. The ethos of local authorities is to provide services that are accessible to all and this has a fundamental influence on the way their services are presented and in particular the charges that are established. One of the clear defining factors between the two offerings is that Local Authorities allow the use of their facilities on a pay as you go basis rather than insisting that you have to be a member which is the private sector approach.
In the past it has generally been perceived that Local Authority provision is of a lower quality and offered at a lower price than private providers,however, this is changing, with thischange being brought about by a number of factors most notably higher customer expectations and the economy.
A key factor in assisting Local Authorities to respond to these developmentshas been the influx of private sector investment over the past decade that has significantly improved the quality of the provision within municipal leisure facilities. This has been the case in Salford where the facilities are now comparable with anything you will find in the private sector,while being located at a convenient distance to wherever you may live in Salford (distance travelled to facilities is a major factor when users select their venue).
The market has witnessed a migration away from the mid-marketprivate sector providers to the ever improving local authority facilitiesand they have responded to this by reviewing their product offering and pricing strategy. Many competitors have reduced their fees in an attempt to claw back customers with this beingnowhere more apparent than the new phenomenon of the budget gyms such as “Pure Gym”.
Pure Gyms only offer the gym product, are open 24/7, are only staffed at limited times, offer no contract, no cancellation period and are cheaper than our memberships. Currently,we are not aware of any planned for Salford and the closest is to be found within the city of Manchester.
2. SalfordFitCity Pricing
In the FitCity facilities customers can choose to either pay as you go, have a pay as you go membership (Freedom) or have an all inclusive direct debit / annual membership (Aspire unlimited)
Pay as You Go
Standard / Freedom / Freedom PlusAdult Swim / £3.10 / £2.60 / £2.00
Junior Swim / £1.60 / £1.10 / N/A
Fitness Suite
Induction / £15.00 / £15.00 / £15.00
Pay As You Go (Adult) / £5.20 / £4.70 / £4.00
Pay As You Go (Junior) / £2.70 / £2.40 / N/A
Currently approximately 3% of our income through the fitness suites is generated via pay as you go.
Memberships
Freedom / Annual feeAdult / £10
Junior / £4
Family / £15
60-69yrsAnnualSwimPass / £30.00
All Inclusive Memberships1 / Fee
Joining Fee / £20.00
Adult aspire Monthly D/Debit / £29.99
Adult aspire Concession Monthly D/Debit / £19.99
Junior aspire Monthly D/Debit / £14.99
Fully Paid Annual aspire Membership / £330.00
Fully Paid Annual aspire plus Concession Membership / £225.00
Fully Paid Quarterly aspire Membership / £110.00
Fully Paid Quarterly aspire plus Concession Membership / £80.00
Over 70's Annual membership / £10 per year
Junior monthly membership (11-16 year olds) / £14.99
The Freedom pay as you go membership is valid for 12 months. It entitles holders to pay the discounted Freedom prices every time they use the centre.
Customers who purchase a Freedom membership but aged 17 -19yrs, 55-69yrs, or full time students or on certain benefits will be issued with a Freedom Plus membership and pay the Freedom Plus pay as you go prices.
The Aspire unlimited membership is available to all aged 11 – 69yrs old but for those aged 11 -19yrs, 55-69yrs, full time students and/or claiming certain benefits they will be offered the concession Aspire Plus rate.
The Aspire unlimited all inclusive membership is exactly that: it entitles members to access all Fit City facilities and all individual activities, fitness suite, swim, sauna/steam all group exercise classes (150 across all sites including yoga, circuit training, boxercise) with no time restrictions. There is no contract with members just being asked to give 2 months notice to cancel.Our principle is to offer a simple, no fuss membership at an affordable price.
50% of the current membership are on our concessions Aspire Plus rate
3. What is Happening in the Private Sector Locally?
Private operators generally insist upon an annual contract and only offer facilities to those on direct debit.
SCL have researched the membership prices of local private providers via their web sites and a list is as follows,
- DW Fitness at Trafford, Bury Leigh and Bolton.
- Esporta on Salford Quays
- Fitness First Manchester
- Total fitness Walkden and Warrington
- Pure Gym in Manchester and Warrington
- Marriot Walkden.
Note Virgin, David Lloyd do not provide any price details without you visiting the facility.
A summary of the prices offered is as follows:
Note: standard membership price per month, for gym, swim, sauna and fitness classes unless indicated:
Monthly price Joining fee
SCLL £29.99 £20.00
DW Fitness Trafford/ Leigh/Bury £38.00 £15.00
DW FitnessBolton £25.00 £15.00
Fitness FirstManchester £35.95 no pool £25.00
12 month contract one club £29.99 £25.00
24 month contract one club £27.95 £25.00
Total Fitness Walkden £42.99 n/a
Total FitnessWarrington £45.00 n/a
Pure GymManchester £16.99 gym only £25.00
Pure GymWarrington(open March 11) £12.99 gym only £12.50
Esporta Salford quays £63.99 no
12 month contract £53.99 no
16 Local Authorities average cost £31.43
Fitness First, Total Fitness and Pure Gym Manchester have raised their prices for January (by £1, £1 and £3.99 a month respectively).
Total Fitness offer a discount to over 55’s at both Walkden and Warrington at £35.00 per month
No private operators offer concessionary memberships for those on benefits,
Some private operators do offer an off peak option (detailed below)
Off Peak
DW Fitness Trafford/ Leigh/Bury £28.00 over 55’s £21.95
DW FitnessBolton £20.00
Fitness FirstManchester £28.95
weekend only £20.95
weekdays am only £26.95
Esporta Salford quays £53.99
Some private operators offer a discounted annual pay up front option (detailed below,standard price only)
Annual Price
SCLL £330.00
DW Fitness Trafford/ Leigh/Bury £456.00
DW FitnessBolton £300.00
Fitness FirstManchester £359.00 no pool
Total Fitness Walkden £540.00
Total FitnessWarrington £495.00
Pure GymManchester n/a
Pure GymWarrington(open March 11) n/a
4. FitCityCurrent Membership Performance
Currently SCL memberships are thriving, in October we posted our highest membership figure of 7783 (currently 7597 compared with 6259 same month last year). 6 of our 9 facilities posted their greatest membership rate in October since the memberships started in 2002.
Cancellations are down on last year 305 November 10 compared with 377 November 2009. Sales are down over the period April to November (3182 09/10 compared with 2903 10/11), however this is due to the opening of Ordsall last year that initially created a surge of membership sales.
5. Summary of Findings
There is comparatively little private sector provision in Salford. Our facilities have benefitted from significant investment over the past decade which has resulted in our customers enjoying the very best equipment in surroundings that one would expect to find in private sector facilities.
There are 2 key differences to what FitCity customers are offered in comparison to what is offered in the private sector:
- FitCityfacilitiesare accessible to all through a pay as you go option including discounted pay as you go prices to specific customers.
- The Aspire membership offers unrestricted access to those on benefits, over 55 or between 16 and 19 at a concessionary price.
No private operators would offer either of these “products”.
In terms of price, SCL offers the entire range of facilities and activities at a lower price than all private providers with the exception of the Pure gym and DW Fitness inBolton (although our unrestricted concessionary price is cheaper than their off peak rate).
Our facilities are competitive in terms of quality and are local to the people of Salford. Our approach of continually developing our service whilst maintaining competitive pricing has resulted in a growth in use of all the facilities and led to customers being retained longer. It is very unlikely that customers leave or potential customers chose to join a private sector competitor due to the factor of price alone.
Currently our sales are performing well across all sites and our cancellations are down which is resulting in a growth of memberships overall. The environment is, however, constantly changing and it is essential that we continue with our strategyof constantly monitoring our performance, reviewing our pricing and product offering in light of what is happening in the local and national context.