Mundy's Moment: The end of the 'price premium' strategy?

The end of the ‘price premium’ strategy?

Investec's Alastair Mundy assesses the challenge posed to established brands by cheaper competitors.

On a friend’s recommendation, I recently popped into Pure Gym. The company is a relatively new ‘budget’ fitness chain that is expanding quickly in the UK. It ticked lots of boxes: it had all the essential equipment, was clean, had fair-sized changing rooms and a plethora of vending machines offering overpriced, sugary food. It seemed to have a good mix of genders, ages and shapes, and is open 24 hours, seven days a week, for those seeking flexibility in their exercise timetable. Monthly fees are, depending on location, about £20 per month – a significant discount compared with the mas...