Yahoo Finance The Gym Group set to raise prices to offset higher costs
The Gym Group has said it will have to push up prices to help offset surging energy bills and costs across its 203-strong chain.
The low-cost fitness chain insisted it will still remain among the cheapest in the market even with plans to raise prices this year to combat a 4-6% hike in its costs.
It is bracing for an increase of around £2 million in utility bills over the second half of the year.
The firm said while price rises will not fully offset cost pressures this year, it hopes that surging membership numbers will help long-standing sites recover to pre-pandemic sales by the end of 2022.
The Gym Group has seen a surge in membership after it reopened last April and as all Covid restrictions have since been lifted, with numbers growing by nearly a quarter to 718,000 by the end of 2021.
Membership has risen further so far in 2022, to stand at 825,000 in February – a 50% jump year-on-year.
The firm saw membership rise by 14.9% in the first two months of 2022 in an “encouraging start” to the year, despite an impact from the spread of the Omicron variant of coronavirus on early January trading.
However, annual results showed the impact of the pandemic on the group of last year’s lockdowns, with the group remaining in the red with pre-tax losses of £44.2 million, though this narrowed from losses of £47.2 million in 2020.
Revenues jumped 31.7% to £106 million last year.
It is planning a “brand transformation” starting this spring to further boost membership, with new signage being rolled out across all sites and a brand relaunch campaign.
More sites are also in the pipeline, with aims to open another 28 gyms in 2022.
Chief executive Richard Darwin said: “The Gym Group has had an encouraging start to the year, building on the momentum of our excellent recovery in 2021.”
He added: “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.”
