In 2018 the financial journal Barron’s described spending by the over 65s, the ‘longevity economy’, as ‘the mother of all untapped markets’. Not only is this age group growing dramatically in number and proportion around the world, its economic importance is also growing.
- There are currently around 12m people aged over 65 in the UK (18% of the population)
- This figure is expected to rise to 22% by 2030 (a population approximately the size of London)
- In 2014, Saga reported that the over 50s accounted for around half of spending on health, recreation and culture, alcoholic beverages, restaurants and hotels
- Consumer spending in the over 50s has consistently outstripped the spending of younger age groups
- The over 50s account for 76% of the nation’s financial wealth
“The rise of the longevity economy remains the most important yet predictable market event facing the investment community today but selling more of the same old solutions is no longer a safe bet.”
Joseph F. Coughlin, founder and director of the MIT AgeLab
Spending confidence and the previous recession
Following the economic downturn in 2008/9, the over 50s were considered to be important in lifting the UK out of recession, accounting for over 44% of UK household expenditure in 2009. By 2012, this grew to 47%.
Saga’s strategy director said: “People are living longer and have more active social and economic lives which is changing how we think about ‘retirement’. As a consequence the over 50s have become, through their hard work, big earners and even bigger spenders – today they account for some 76 per cent of the UK’s financial wealth. Their confidence in the future has made them willing to lift their spending faster than other age groups and, in doing so they have helped drive the UK out of recession.”
The cause of this consumer confidence could be:
- Many in this age group are established in their careers and perhaps more job secure
- Increased financial stability over time
- Those on good pensions are secure in their income and want to enjoy life
It is well known that just 15% of sporting age adults buy gym memberships and the sector acknowledges that centres are dominated by younger, fitter people. Shapemaster has long maintained that operators who take seriously over 50s market will attract an untapped membership group which the competition consistently overlooks.
In the post-COVID ‘new normal’, we expected there to be aggressive competition over “the 15%” as clubs try and retain those whose memberships have been frozen during lockdown.
According to the 2019 ukactive Moving Communities report on active leisure trends, those aged over 55 account for 23% of the membership base of UK leisure centres, yet this age group accounts for 37% of the UK population. There is a market gap. An opportunity.
COVID-19 has given us all an opportunity to shake up how we work and do business and the ‘new normal’ should not be a scramble to recreate what we had before the pandemic. Instead we should look up from the treadmill and see new opportunities.
Shapemaster suites present the opportunity to attract 300 to 400 brand new members who would not have considered coming through the doors of the centre with the traditional offer.
This ‘new generation of exercisers’ brings a business benefit of £90k to £120k new annual income per suite, without considering secondary spend.
The health and social care front line
At a ukactive National Summit, Sir Simon Stevens, NHS Chief Executive, described the leisure sector as ‘the front line of the NHS’. Physical activity is vital to our economy as a preventative and rehabilitative health and wellbeing intervention, the ‘miracle cure’ as Dame Tanni Grey-Thompson described it.
Public sector leisure operators who take this seriously will have an opportunity to demonstrate a unique advantage to local authorities over their competition. And as more leading operators include Shapemaster in their bids to retain or win operator licences, we provide a competitive edge.
Our mission is to help people remain fit and healthy in the second half of their lives. This provides operators and local authorities with a demonstrable socio-economic benefit.
It’s all about Joan
For all the economic and business advantages of keeping the over 55s more active, more often, it comes down to people. No spreadsheet or bottom line can outweigh the emotional impact that Shapemaster equipment has on people’s health and social lives. At the end of the day, this matters more than anything.