Two things happened this week that belong in the same sentence, and nobody put them there. On Wednesday the Federal Reserve raised interest rates for the first time since 2023, and by Friday the prime rate at the big American banks was 7%. On Thursday a Harris Poll for the Good Sports Cost of Play Index reported that cost is now the number one reason a parent considers pulling a child out of sport — ahead of injury, ahead of the child not enjoying it.
So money got more expensive to borrow in the same week the evidence says families are running out of room to spend it. If you are carrying a build-out loan, a line of credit or a card balance, your interest just went up. If you sell a children’s programme, your best enrollment argument in twenty years just got published — and most owners will respond to it by running a discount, which is exactly the wrong move. Ten items.
1. The Fed raised rates for the first time since 2023
The Federal Open Market Committee voted 12-0 on 16 September to raise the target range by a quarter point to 3.75% to 4%, saying “inflation remains elevated” and that the increase would “support a timelier return to the Committee’s 2 percent goal.” The statement also described economic activity as “expanding at a solid pace.” Fox Business reported that this is the first increase since July 2023, that the committee’s projections point to one more quarter-point rise this year, and quoted Chair Kevin Warsh saying: “Inflation is too high and has been for too long.”
Stephen: Three years of everyone assuming the next move is down, and the next move was up. I am not going to pretend to forecast the Fed and neither should you. Here’s what I will tell you definitively: cheap money is what let a well-funded competitor open a beautiful 6,000 square foot facility three doors down from a school doing $18,000 a month. When money costs more, that stops being free — for them. It also stops being free for you, so if your plan for the next twelve months depends on borrowing, price it again at the new number before you sign anything.
2. Prime went to 7% within 48 hours
Wells Fargo and Bank of America raised their prime lending rate to 7% effective 18 September, one day after the Fed’s decision. Prime is the reference rate underneath most small-business lines of credit, most variable-rate equipment finance and most business credit cards.
Stephen: This is the one item on the list that hit your bank account this week whether you read about it or not. Go and look at what you actually owe on a variable rate — the line of credit, the mat financing, the card you put the summer camp deposits on. Write the balance down. Then look at your tuition and ask whether one is moving and the other isn’t. Debt reprices itself automatically. Your prices only move when you decide.
3. Cost is now the top reason parents consider quitting youth sport
The 2026 Good Sports Cost of Play Index, conducted by The Harris Poll among 574 U.S. parents between 23 and 25 June, found that 26% of sports parents name unsustainable cost as the leading reason they would withdraw a child — ahead of injury concerns at 24% and lack of enjoyment at 23%. That figure was 21% in 2024. Coverage of the same index reports 68% of parents have seriously considered removing a child from sport, 77% believe private clubs and travel teams are pricing families out, and that even in households earning over $100,000, 58% call equipment costs a source of financial stress.
Stephen: Read that again: 77% of parents think travel ball and private clubs have priced them out. That is not a warning for our industry, that is the largest enrollment opening I have seen handed to martial arts schools in twenty years, and it is sitting in a press release nobody in your market has read. The family quitting the $4,000-a-year travel team is not looking for something cheap. They are looking for something worth it, close to home, four nights a week, where their kid is known by name. That is your school on its best day. Go and say so, out loud, in your marketing, this week.
4. Circana: consumers are buying fewer things and paying more for them
Circana reported on 14 September that U.S. August retail dollar sales rose 0.8% year over year while unit demand fell 1.7%. Discretionary general merchandise dollars were up 1.4% with units flat. The firm said nearly 60% of shoppers are being more cautious or cutting discretionary spending, while about 30% remain selective — willing to spend in the categories that matter to them. “Consumers are redefining discretionary spending so successful brands must move beyond competing on price alone,” said Circana’s Kiara Barrett.
Stephen: Dollars up, units down. People are buying less and paying more for what they choose to keep. That is the whole ballgame for a school owner, and it kills the excuse I hear every September: “my market is price sensitive.” Your market is not price sensitive, it is value sensitive, and those are opposite problems with opposite solutions. One is fixed by discounting, which is how you go broke slowly. The other is fixed by being the thing the family refuses to cut.
5. Britain: inflation back up to 3.1%, Bank of England holds but three members voted to hike
The Office for National Statistics published August CPI on 16 September: the annual rate rose to 3.1% from 2.9% in July, CPIH to 3.3%, with services inflation steady at 3.6% and motor fuels up 23% over the year. The next day the Bank of England held Bank Rate at 3.75% on a 6-3 vote, with three members voting for an increase to 4%. Governor Andrew Bailey said that the longer energy-driven pressure persists, “the more likely it is we will need to raise Bank Rate to ensure that inflation falls back to our two per cent target.” The Bank expects inflation near 4% in early 2027.
Stephen: Services inflation at 3.6% is not an abstraction to a British school owner — it is the instructor wage you are about to be asked for and the hall hire that goes up at renewal. And motor fuel up 23% is the reason a mum in a village nine miles away quietly stops driving to your Tuesday class. If you run satellite or hall-based sessions, look at your catchment by drive time this week, not by postcode.
6. Canada: inflation steady at 3%, rent accelerating
Statistics Canada reported on 14 September that the Consumer Price Index rose 3.0% year over year in August, matching July. Rent rose 2.8% year over year, up from 2.5% in July, with Manitoba and Ontario driving the acceleration. Gasoline was up 22.8% and travel tours up 26.1%; grocery inflation ran below headline at 2.8%.
Stephen: Rent accelerating while grocery inflation slows tells you where the squeeze lands: on anybody who signs a lease for a living. That is you. If your renewal is inside the next eighteen months, start the conversation now, while you are a tenant in good standing and not a tenant with ninety days left. The worst time to negotiate anything is when the other side knows you have no alternative.
7. ukactive research: people join to belong, and 31% stay out because they have nobody to go with
Research published on 16 September, conducted by Savanta for ukactive among 6,395 UK adults between January and July 2026, found that making new friends is an important reason for membership across every generation: 51% of Gen Z, 53% of Millennials, 37% of Gen X and 35% of Baby Boomers, and 47% of women overall. Among people hesitant about joining, 31% said they lacked confidence because they had “no one to go with.” ukactive chief executive Cameron Saunders said gyms and leisure centres have replaced pubs and youth clubs as social hubs for younger adults.
Stephen: Thirty-one percent of the people who did not join said it was because they had nobody to come with. Nobody. That is not a marketing problem, it is a buddy-referral programme you have not run since 2019. And note what this does to the argument that we compete with the gym on facilities. We do not. We have what they are spending research money trying to manufacture — a room full of people who notice when you are not there.
8. A €600 million bid for France’s biggest budget gym chain
Health Club Management reported on 17 September, and Athletech News on 18 September, that Providence Equity Partners — owner of VivaGym — is leading a roughly €600 million (about $685 million) race to buy Fitness Park, France’s largest low-price gym operator with more than 400 clubs. The reporting cites the Spanish daily Expansión, names JPMorgan as coordinating the process, and notes a combined group would run around 900 clubs. VivaGym itself passed 450 clubs after acquiring Synergym earlier this year.
Stephen: Nine hundred clubs assembled by people who will never teach a class. I have no quarrel with that — it is a legitimate business — but understand what it means on your street. Their model needs volume at a low price and near-zero labour. Yours needs 180 families who would notice if you closed. Do not let a private equity roll-up drag you into pricing like a commodity. You are not selling access to equipment, and the moment you act like you are, you lose to someone with €600 million.
9. A big-box franchisee buys into boutique: 25 studios in one signature
Athletech News reported on 15 September that CR Fitness, one of the largest Crunch Fitness franchisees, signed a multi-unit agreement for 25 Yoga Joint studios across Florida and into Texas — its first investment outside budget gyms, nine months after a $350 million investment from Sixth Street. CEO Tony Scrimale said: “We see an opportunity to take what Yoga Joint has created and pair it with operational experience our team brings,” adding, “We’re not done.”
Stephen: Twenty-five studios, signed by an operator who already knows how to run a hundred locations, funded by an institution. That is the profile of the person opening near you now. Here’s reality: you cannot outspend that and you should stop trying. What you can do is out-teach it, out-follow-up it and out-relationship it — and start by answering your phone between nine and eleven in the morning, which most of them cannot be bothered to do either.
10. A chain that pays members to show up — and a software vendor worth watching
Two operating-model items worth your attention. First, Urban Gym Group announced on 18 September its first two UK sites for TrainMore, in Marlow and Wembley, built on a model that gives members £1 off their next payment for every qualifying 30-minute visit, capped at the value of the membership. TrainMore runs more than 50 clubs in the Netherlands. Second, on the martial arts side, MMA.INC confirmed on 15 September that its BJJLink platform is handling memberships, billing, payments, scheduling, attendance and student progression at the UFC GYM jiu-jitsu studio that opened in Manhattan on 8 August, with a Florida location expected in January 2027. The same release repeats the platform’s July figures: 389 paying academies and an annualised payments run rate of about US$21 million. In the same fortnight the company disclosed a US$4.0 million equity placement and, on 10 September, an annualised operating cost reduction of about US$1.71 million.
Stephen: Take these together, because they are the same lesson from two directions. A Dutch chain has worked out that attendance is the whole business and is willing to pay cash for it — we have known that since the attendance card was invented, and most schools still cannot tell you who missed two weeks. And on the other side, the company that would like to sit between you and your students’ bank accounts is cutting costs and raising money at the same time as it announces partnerships. I am not predicting anything about anybody. I am telling you to know who holds your billing data, what it costs to leave, and whether you could export your student list tonight. If the answer is “I’d have to ask them,” that is your answer.
What I’d do about it this week
- Write down every variable-rate balance you carry — line of credit, equipment finance, business cards — and what the payment becomes at the new rate. Decide this week whether you are paying it down or refinancing it. Do not find out in January.
- Build one message aimed at the travel-sports family. Not a discount. A comparison: what a season of club sport costs a family, what your programme costs, how many nights a week their child trains, and who will know their name. Send it to your parent list, put it on your website, and give it to every current family to hand to one friend.
- Restart the buddy referral. Thirty-one percent of non-joiners said they had nobody to come with. Every student brings a friend for two weeks, and you run it as a real programme with a deadline, not a poster.
- Audit your billing relationship. Who holds the merchant account, who owns the student data, what the notice period is, and how you would export everything if you had to. One hour, written down, kept off the platform it describes.
- Price on purpose before the end of the month. Services inflation is above 3% in the U.S., the U.K. and Canada, rent is accelerating, and consumers are still paying more for the things they value. If your tuition has not moved in eighteen months, that is a decision you made by not making it.
Stephen Oliver, MBA, 10th Degree Black Belt
