Working out and building up

Retail & leisure
POLAND According to the ‘The Fitness Industry in Poland and Europe Still Works Out’ report, prepared by Deloitte and the Polish Association of Fitness Employers (PZPF), the Polish fitness club market is set to grow.

Gym owners are looking to expand and for low rent space. Poland is the ninth largest European market in terms of the income generated by fitness clubs. This represents a 3 pct share of the European market, which also includes data from Russia and Turkey. The market penetration in Poland amounts to 7.3 pct, but this is still well behind the ‘fittest’ countries in Europe – in Sweden the penetration amounts to 16.7 pct, in the Netherlands 16.4 pct and in Norway 23 pct. “Poland and Turkey are growing thanks to the strong GDP growth and the low penetration levels,” point out the authors of the report. “In Poland there is still a rich tapestry to work with. It is necessary, though, to look for niche markets, such as clubs for senior citizens,” says Przemysław Zawadzki, a manager in the audit department at Deloitte.

Shopping centres change tack

Poland has 5 out of the 19 biggest clubs in terms of membership numbers. These include: German chain McFit/High5 (number one in Europe), Fitness World (number 6), SportCity/Fit For Free (number 9), Curves International and Mrs. Sporty (number 18 and 19, respectively). Fitness World and McFit have been ranked in Poland for the first time. At the end of 2015 there were 2,520 fitness clubs across the country, but only 20 more than at the end of the previous year. “A few hundred clubs closed down last year and have been replaced by new ones,” explains Przemysław Zawadzki. “We have the market with the most optimistic prospects in Europe. Most club owners, that is, over 80 pct, want to increase their income,” he adds. As the authors of the report emphasise, fitness is a low cost business. They are looking for locations with low rents. Recently a shopping centre has been the most wanted location. “Now shopping centres themselves wish to have a fitness club, but in the past they did not even want one. They are even organising joint promotional campaigns,” claims Marta Wrońska, another manager in the audit department at Deloitte, who adds that the trend to open fitness clubs in office buildings can be seen only in the biggest cities, where it is the owners of the buildings who are taking the initiative, as an incentive to attract tenants. “In 2014 virtually only mid-market clubs, those open to the general public, were present in Poland. Last year things began to change. Niche clubs and low-cost clubs entered the market. This year the business will be looking for niche markets to increase the number of customers who have shown no interest in gyms so far,” says Robert Kamiński, the president of the management board of the PZPF. Low-cost chain McFit, the biggest chain in Europe, is a good example. “The clubs in Poland are somewhat better – I would say we have ‘a low-cost model plus’,” adds Robert Kamiński. The average membership in a club in Poland is 1.3 people per sqm. In Europe it is 2 people per sqm. This is supposed to be the target for chains operating in Poland. The price for enrolment in a club stabilised last year at about EUR 29.3 for a monthly membership. “For this reason clubs that cannot or do not want to lower their prices will put an emphasis on the higher quality of their services and better communication with customers,” says the president of the PZPF. New chains may still enter the country to boost the market further, but for the time being there have been no announcements of the possible debuts of any other European players in Poland. The president of the PZPF adds that we will also witness a consolidation of the market. Chains will either merge or purchase smaller players, as in the case of the takeover of the Fitness Park chain by Total Fitness. “Western chains are tending to wait for the consolidation and development of the market in Poland, since for the time being our market is too small for them,” adds Robert Kamiński.