Creating a new shopping experience is behind the acquisition of Leon by Asda

Asda will become more of a destination shopping experience with its acquisition of fast-food chain Leon, say leading tax and advisory company Blick Rothenberg

Daniel Burke, a partner at the firm said: “EG Group, the new owners of Asda, have acquired the fast-food chain Leon Restaurants for £100m, in order to provide a better all-round shopping experience for its customers.”

He added: “ EG is no stranger to food outlets. They own more than 6,000 petrol stations across 10 countries, and have been installing Starbucks, KFC, Burger King, Greggs, Cinnabon and Subway branches at their forecourts.”

Daniel said: “Asda and Leon are not two businesses you would expect to come together. Asda is traditionally ‘low cost’, whilst Leon provides good quality fast-food with premium prices, but it is clear that Asda are looking at providing a new customer experience.”

He added “I would expect Asda to follow this up with more acquisitions or partnerships in order to make Asda a ‘Go To’ place for all of your shopping needs.”

Daniel said: “EG appears to be closing in on Caffe Nero after buying up the chain’s debt pile, and have even considered buying Topshop.”

He added: : “Asda may well become the bricks and mortar equivalent of Amazon. A place where you can go to buy anything you need.”

Daniel said: “This is part of a wider trend in the retail sector where larger players are acting as “virtual department stores” for a number of brands. The attraction for the established retailer is younger/innovative brands while the new brands get access to an established distribution network.”

He added: “ Leon was majority-owned by two private equity firms, Active Partners and Spice Private Equity, with stakes of 30% and 40% respectively. Its founder John Vincent owned 15%, whilst its other two founders held the other 15%. “Given the tough year the hospitality sector has endured the offer was probably too good to turn down by the owners.”