Leon Targets Airports and Stations in Bold Turnaround Push
Fast-food chain Leon plans a turnaround by closing High Street outlets and expanding in airports and stations as rising business rates hit hospitality.
Fast-food chain Leon will open more restaurants at service stations, airports and train stations after closing 20 of its high street outlets, its boss has said.
John Vincent said that rising business rates and overall cost increases meant the high street was no longer as profitable. Leon is losing £10m a year.
Vincent, who co-founded the chain, bought the company back from Asda last year. But last month the firm appointed administrators and announced a major restructuring of its 71 restaurants, which employ 1,000 people.
The government says it is supporting hospitality businesses with a support package to limit bill increases.
Vincent told the Big Boss Interview podcast that tax increases were "hugely damaging" for the hospitality industry.
He said that if taxes on businesses continued to rise, "only those who are... not selling very good quality food" would survive.
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In April, business rates relief introduced for the hospitality sector during Covid will end. At the same time, increases in the rateable value of properties will also come into effect.
The Treasury has indicated it will announce further support for pubs in the coming days, but has faced criticism from other hospitality businesses about why they are not included.
Shadow Chancellor Rachel Reeves said at a press conference on Wednesday that she was "working with the hospitality sector".
Vincent said that traditionally, "the more fast-food units you have, the better the operation, the better the supply chain, the better you can buy, the better your systems can be."
However, he added: "I'm not sure that's true anymore because of the pressures on the market." Vincent said that Leon would be closing its restaurants outside of London, but added that doing business in the capital was becoming "extremely difficult" due to the high operating costs and "exorbitantly high, ever-increasing rents."
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He said that while airports, in particular, take a large share of a retailer's earnings, a 2% profit margin there "is equivalent to 6% on the high street." Vincent added, "You can generate two or three times more revenue at that airport location compared to a high street location." Responding to Vincent's comments, a Treasury spokesperson said: "We are supporting hospitality businesses with a £4.3bn support package to limit bill increases.
The spokesperson added that this is "in addition to capping corporation tax at 25%, cutting red tape and taking action on the cost of living to boost the high street."
Purpose and Mission
Beyond rising costs, Vincent believes Leon is struggling because it has strayed from its original mission of providing good quality fast food for ordinary people.
Vincent said the menu was initially simple: meatballs, a superfood salad and tapas – relatively healthy options at a time when fast food was dominated by burgers, fried chicken and kebabs.
But after being sold in 2021, Leon "lost its verve, leadership and confidence," resulting in "a lack of clarity about what the menu should be," he said.
He has previously said he has sympathy for the company's previous owners, as restaurants have faced numerous challenges since the pandemic.
"I think Leon needs to find its common sense again," he said. "At the moment, we don't always make sense to people."
He plans to bring back simplicity with menu changes this year: "We, as a brand, need to understand and remember that we were always about the best food for the most people.
"We weren't about fancy fast food for rich people. That was never our intention."
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