A new player in fitness: Planet Fitness enters the AU market

Planet Fitness is a brand that will feature more prominently in the health & fitness space in the months and years to come.

Founded in the US in 1992, the brand operates over 2,000 fitness clubs worldwide including 6 clubs in Australia with a further two to open in 2021. Planet Fitness is one of the fastest growing fitness brands and its unique value proposition as being a “judgement free zone” that caters to first time novice and casual gym users.

With a proven track record of successfully operating 11 fitness clubs in Oregon and Alaska, Bravo Fit Managing Director Tanner Halton moved to Australia to build on the success of the brand in the US identifying Australia as being a good fit for the business model.

Finding the right location

In early 2021, the Planet Fitness parent company contacted Geotech to inquire about assistance in better understanding how the brand could successfully identify potential new locations and profitably grow the business.

There are a number of factors that define a good location opportunity for any fitness brand given the competitive nature of the business. Over and above having sufficient numbers of the right  demographic the brand attracts, positioning, site visibility, parking and access all contribute to the overall success of a location.

Other less tangible factors are what separates Planet Fitness from the crowd- this includes a regimented cleaning process (Tanner sites this in key customer survey data as well as friendly (non-judgmental staff). Another key benefit for the brand is having large (around 1800sqm) clubs, with plenty of space and added features such as massage chairs & hydro massage for Black card members.

Geotech were engaged to firstly undertake market research to broadly identify the overall market opportunity for the brand (at a macro level) then identify specific locations that offered strong opportunity given the core demographic target market. Geotech were then able to create suitable catchment areas around locations that had enough population to support a new club.

Geotech then designed some tools Planet Fitness could use to help focus only on those sites worthy of further in-depth analysis and a customised report outlining the relative strength of the site based on a number of key factors (referred to above) for Plant Fitness.

The Fitness Industry at a glance

The industry in Australia is characterised by moderate market share concentration, with the top four players accounting for over 65% of revenue. Anytime Fitness is the largest industry gym brand, having grown strongly since entering Australia in 2008. F45 has rapidly increased its market share since entering the industry in 2013. The brand’s franchise model has boosted F45’s strong growth, a similar trend reported by other operators upon their entry into the Australian market. In addition to steady growth from existing major players, the ascension of Viva Leisure as a major player has significantly increased market share concentration in the industry. Viva Leisure accounted for less than 2% market share in 2019-20. However, its acquisition of Plus Fitness has propelled the company to more than 8% in the current year.

Strong competition among the largest players, and from other gym chains such as Genesis Fitness and Snap Fitness, has benefited consumers. Market share concentration also increased during the years following Quadrant Private Equity’s acquisition of Fitness First, Jetts Fitness and Goodlife in late 2016. The operations of these brands have been combined under one entity, Fitness and Lifestyle Group Topco Pty Ltd. Market share concentration is projected to continue increasing over the next five years as major players expand.

Next steps for Planet Fitness?

With a detailed network plan in conjunction with Geotech’s assistance, Planet Fitness now have a number of recommended locations to pursue which will substantially reduce time spent on sites that clearly don’t provide enough opportunity for success.

Geotech works with businesses across many industries to identify potential expansion locations, based on the latest consumer data and behaviour metrics. For more information or a confidential discussion, contact Global Business Development Manager, Jeff Vassel, at [email protected].

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