COMMENT British retail has endured a terrible year the past 12 months with multiple-big name brands and high street institutions entering administration, seeking to slash the size of store estates or downsizing individual outlets. The race for space of previous years has left many in the sector overweight in store terms and not fit for purpose when confronted by a consumer ever further wedded to online purchasing.
The result is that retail landlords and operators are confronted with declining foot traffic and rising vacancies, meaning there is a necessity to evolve. Future-thinking retail landlords and operators are increasingly recognising the importance of creating more immersive experiences and interesting, convenient spaces for shoppers, which cannot be replicated online, in order to attract visitors.
The fitness sector, on the other hand, is thriving in large parts, with more gyms, more members and a greater market value than ever before, particularly driven by rapid growth at the low-cost end of the market. According to the latest UK Fitness Industry Report, total gym membership in the UK is approaching 10 million, so now one in every seven people in the UK is a member of a gym. The low-cost market is also creating greater access allowing people previously priced out the opportunity to exercise.
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COMMENT British retail has endured a terrible year the past 12 months with multiple-big name brands and high street institutions entering administration, seeking to slash the size of store estates or downsizing individual outlets. The race for space of previous years has left many in the sector overweight in store terms and not fit for purpose when confronted by a consumer ever further wedded to online purchasing.
The result is that retail landlords and operators are confronted with declining foot traffic and rising vacancies, meaning there is a necessity to evolve. Future-thinking retail landlords and operators are increasingly recognising the importance of creating more immersive experiences and interesting, convenient spaces for shoppers, which cannot be replicated online, in order to attract visitors.
The fitness sector, on the other hand, is thriving in large parts, with more gyms, more members and a greater market value than ever before, particularly driven by rapid growth at the low-cost end of the market. According to the latest UK Fitness Industry Report, total gym membership in the UK is approaching 10 million, so now one in every seven people in the UK is a member of a gym. The low-cost market is also creating greater access allowing people previously priced out the opportunity to exercise.
Rapid growth
Consequently, fitness is now one of the UK’s fastest-growing bricks-and-mortar based industries. With 275 new facilities having opened in the past year alone, operators are looking to the fitness sector to offer them a lifeboat to help transform both new and existing spaces.
Smart landlords are harnessing the health of the gym market to generate additional footfall. Elsewhere in retail, supermarkets, which are looking to evolve operating models and store sizes, in the face of fierce sector competition, are also seeing the value in adding a gym element to larger footprints.
Despite the sector’s challenges, there remains intense competition for the best sites and the gym’s location, as ever, is critical. For landlords, careful covenant assessment is paramount. As a listed business with a responsibility to shareholders, we take a long-term view and low levels of debt, a strong covenant and 15-year leases give us and our partners peace of mind. Nationwide, we have passed more than 150 sites and we have plans to add a further 15-20 next year as well.
Flexibility
The flexibility of low-cost gym operators like ourselves is also extremely attractive to landlords, with an ability to locate anywhere from the basement to the top floor, and as part of a variety of different mixed-use schemes. The result of shifting market dynamics means that gyms that were once excluded from retail destinations are now seen as the cherry-on-the cake. These tenants are helping reinvent spaces as places for entertainment as well as hubs for living, working and playing.
So as the retail sector continues to adapt, operators must harness new trends which provide a solution to their woes, and evolve to meet the demands of consumers. With the low-cost segment of fitness showing no signs of slowing down, it is clear that gyms can play a pivotal role in securing the future health of retail.
