Ego Restaurants, the chain backed by Luke Johnson, has closed its underperforming Leeds and Manchester restaurants. Ego, which has eight other Mediterranean themed outlets, said that although the restaurants, opened around 18 months ago, were continuing to grow sales their performance had remained below expectations. Ego chairman James Horler told M&C Report that with public sector cuts expected to hit both cities hard, the management time and resources required to bring the sites on in such an uncertain environment had been deemed as an unwanted distraction. “Because of our small company size we had the option to surrender the leases. There’s already a lot of unsold apartments in Manchester and with the government’s public sector cuts I only expect trading for restaurants and bars in the city, and Leeds, to get tougher this year,” said Horler. Horler confirmed that Ego is looking to acquire or merge with another business to fuel growth and was confident that such an opportunity would present itself during 2011. A recent report from property agent Jones Lang LaSalle claimed a North/South divide was growing in the retail sector, with a number of well-known retail chains concentrating their expansion on the affluent South-east and increasingly reining back plans for the public-sector reliant north of England.