Key Areas

Executive Summary

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KEY AREAS

THE MARKET

• Total Market Size - analysis by value 1995-1998 with forecasts for 1999-2002, key factors influencing market development e.g. increased awareness of fitness, increased consumer spending.
• Imports - analysis of overall trade statistics 1993-1998, analysis of intra- and extra-EC imports 1996, high import levels.
• Market Sector Mix - analysis of the sector mix 1998 between the commercial and home markets. Higher share held by the commercial sector.

COMMERCIAL FITNESS EQUIPMENT MARKET 1999-2002

• Market Size - analysis by value 1995-1998 with forecasts for 1999-2002, significant growth in recent years, with high growth forecast up to the year 2002.
• Market Trends & Influencing Factors - increased investment in fitness facilities in both the public & private sectors e.g. First Leisure, Cannons Fitness First; Holmes Place, Whitbreads; development of in-town clubs: new exercise trends.
• Product Mix - greater share held by CV equipment, renewed popularity for single-station exercisers, high growth in elliptical cross-trainers and other low impact equipment, development of value - added services.
• Key Suppliers - Key suppliers and market shares; leading suppliers and brands. Company profiles with financial information.
• Distribution - key distribution channels and shares. Dominance of sales through importers and foreign-owned subsidiaries.

HOME FITNESS EQUIPMENT MARKET

• Market Size - analysis by value 1995-1998 with forecasts for 1999-2002, strong market growth in 1998 with further growth forecast up to the year 2002.
• Market Trends and Influencing Factors - increased awareness of fitness generated by media and public campaigns, more ‘user friendly’ equipment available, high consumer disposable income and expenditure levels, impact of health and fitness clubs.
• Product Mix - dominance of CV equipment, growth in treadmills, recent introduction of elliptical cross-trainers.
• Key Suppliers - leading suppliers’ brands and own brands. Growing presence of commercial suppliers in home fitness market. Company profiles with financial information.
• Distribution - key distribution channels and shares. Dominance of catalogue companies/mail order. Increasing sales growth through retail sector.

KEY MARKET INFLUENCES

• Population Profile - growth in older age groups, medium-term decline in the 20-29 year old age group / Participation Rates in Sports, Games and Physical Activities - increased participation rates in fitness activities in recent years.
• Organisations and Campaigns encouraging Sport & Fitness - Lottery funds by the English Sports Council, Active for Life and Fit for Business Campaigns / Construction of Leisure Facilities - construction output in public and private ‘entertainment’ building sector 1994-1998.
• Consumer Disposable Income & Expenditure - increasing PDI and expenditure by consumers of windfall profits from bank and building society mergers - influence on fitness equipment market.

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EXECUTIVE SUMMARY

The UK fitness equipment market as a whole has been experiencing significant growth in recent years.

The market is anticipated to achieve significant growth rates up to the year 2002, although the rate of growth will slow down marginally as the market approaches maturity. Estimated to be around £167m msp in 1999, total market value is forecast to grow to around £244m by the end of 2002.

Factors such as increased public awareness of health and fitness issues, expansion in the private club sector, Lottery investment in Local Authority leisure facility developments, the sales and marketing activities of equipment suppliers and club operators are helping to stimulate market growth.

The commercial market sector is estimated to be worth around £95m msp in 1999, accounting for some 57 percent of total market sales.

Growth rates in the commercial sector are expected to be stronger than in the home fitness sector during the next three years, with real growth rates of 15-16 percent between 1999-2002. The two key drivers are the considerable rate of expansion among the larger private club operators, such as Cannons, Fitness First and Whitbread, and investment in refurbishing Local Authority leisure centres. Other important factors are growth in the use of corporate facilities, product development and new exercise trends, largely imported from the US.

The trend towards cardiovascular equipment has been a key feature of the market as a whole during the 1990s. However, there is a current resurgence in the use of resistance equipment, in part due to the increasing numbers of women realising the benefits of weight training in conjunction with dieting. The other main factor has been the development of new products such as ‘air resistance’ machines and elliptical weight training equipment.

It is estimated that cardiovascular equipment accounts for around 65 percent of the market by value. Key driving factors include the increasing popularity of the elliptical cross-trainer and demand for other low impact equipment, the application of computer network technology to exercise machines and the growth in popularity of group exercise, especially class cycling. However, demand for treadmills, bikes, rowers and stairclimbers/steppers also remains strong.

Another important development in recent years has been the development of branded support service packages, which typically include marketing and promotion, extended warranties, 7 days a week on-site emergency repairs, CAD layout design services etc..

The leading suppliers in the commercial fitness equipment market are Life Fitness, with an estimated share of 16 percent, followed by Technogym and Pulse Fitness, each with a share of around12 percent, Powersport and Forza Fitness with approximately 14 percent between them.

Imports dominate the market, with an estimated 72 percent of total sales in the commercial sector made through importers on subsidiaries of foreign manufacturers. Approximately 22 percent of sales are accounted for by direct sales by UK manufacturers. The balance of 6 percent of sales is made through distributors, although few companies use this channel.

For 1999 the market for home fitness equipment is valued at around £72m msp and is also experiencing buoyant growth, although not as significant as that in the commercial market. Further substantial growth is forecast during the next three years, averaging around 10 percent annually.

Factors stimulating market growth include increased awareness of fitness, improvements in products and the increasing need for privacy and convenience among certain user sector, such as the over 50s.

An estimated 70 percent of home fitness equipment sales is accounted for by cardiovascular products, with the balance of 30 percent accounted for by resistance equipment.

Exercise bikes continue to be the most popular product type although treadmills are currently experiencing buoyant sales in the home fitness sector. During 1999 the elliptical trainer was introduced to the home fitness market. Perhaps the key development has been the application of interactive computer technology to home equipment, whereby users can become linked to other users through the Internet.

In the home fitness equipment market, imported brands are even more dominant than in the commercial sector. Although many of the key brands, such as Reebok, Weider and Golds Gym are US-owned, some European products also have a high market profile, notably Tunturi and Kettler. The only major UK manufacturer is York Barbell, although Delta Products does supply own brand products, manufactured in the Far East. The other main suppliers in this market include are either direct subsidiaries such as Icon Fitness Lifestyle and Kettler GB or independent distributors e.g. Bolton Stirland and CSA Fitness. Some of the key suppliers in the commercial fitness equipment market also supply into the home fitness sector including Forza Fitness (Reebok), Precor, Life Fitness, Star Fitness and All in Fitness (Nautilus).

An estimated 45 percent of products in the home fitness equipment market is sold through catalogue companies/mail order. Typically, it is budget range equipment, which is sold through mail order, while higher-priced machines are mainly sold through specialist retailers. Total retail sales account for around 35 percent of the total, with other channels, such as direct sales, the Internet and direct response advertising accounting for the other 20 percent.

A number of factors such as economic, socio-economic and demographic issues influence the development of the home fitness equipment market. The most significant of these include the population age structure, participation rates in sports generally, health and fitness awareness campaigns, level of construction of leisure facilities and consumer disposable income and expenditure. All of these factors are likely to have a positive influence on the future development of the UK home fitness equipment market.

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Text © 1999 AMA Research

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Last updated by Jacob van Eldik 03th March 2000