"John Vincent said the upcoming rises in business rates along with overall cost increases means the High Street is no longer as profitable. Leon has been losing 10m a year. Vincent, an original co-founder of 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."
"Vincent told the BBC's Big Boss Interview podcast tax rises were "incredibly toxic" for the hospitality industry. If taxes on businesses increase further, he said, "the only people that are going to survive are those selling... food that's not very good quality". In April, business rates relief for the hospitality sector which came in during Covid will end. At the same time, increases in the rateable value of premises take effect."
"Leon Vincent said that traditionally, "the more fast food units you have, the better the operations, the better the supply chain, the better you can buy, the better your systems can be". However, he added: "I'm not sure this is true anymore because of pressure on the market." Vincent said Leon would close its restaurants outside London, but added the high costs of operating in the capital was making business there "incredibly difficult" with "incredibly high upward-only rents"."
Leon will close 20 High Street restaurants and restructure its estate of 71 sites after reporting annual losses of £10m. The chain plans to open more outlets in service stations, airports and train stations where trading is more profitable. Rising business rates, an end to Covid-era rates relief in April, higher rateable values and upward-only rents in London have made many High Street and capital locations unviable. Founder John Vincent warned that tax and cost increases are devastating for hospitality and risk leaving only lower-quality operators. The Treasury has indicated targeted support for pubs amid sector backlash.
Read at www.bbc.com
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