Two Chicago startup food retailers – Dom’s Kitchen & Market and Foxtrot – announced their merger plans yesterday.
From the Chicago Tribune coverage:
“The merged companies will be helmed by Foxtrot CEO Liz Williams under a new entity, Outfox Hospitality. The deal is expected to close in the fourth quarter, the companies said in a news release Monday. Financial terms of the transaction were not disclosed.
“Foxtrot has 15 stores in Chicago and another 17 across D.C., Dallas and Austin. Dom’s, which is also known for its upscale, downsized concept, has two Chicago stores, one in Lincoln Park and one in Old Town. The company announced plans in September to open a third location in River North next summer.
“Foxtrot stores straddle the line between upscale convenience store and cafe, while Dom’s, launched in 2021 by Chicago grocery scion Bob Mariano and former Dominick’s executives, is known for fuller grocery offerings and a wide range of prepared meal options … Both companies have previously discussed ambitious growth plans. Dom’s said in September it had a working plan to open 15 stores by 2025. In 2021, Foxtrot said it planned to have more than 60 locations by the end of 2022, about double the number of stores it currently has open.”
Dom’s CEO Don Fitzgerald will serve as Dom’s president and chief operating officer during a transition period.
Mariano, Dom’s co-founder and board Chairman Jay Owen, and Foxtrot’s co-founder and former CEO Mike LaVitola all will serve on the merged company’s board and as advisors to the company.
Williams tells the Tribune that the merger was an opportunity to create “a modern food retailer that is going to disrupt this category.”
KC’s View:
I was in Chicago and had the opportunity to visit both formats earlier this year, and on first blush there would not seem to be a ton of overlap in terms of format – Dom’s is a special foods supermarket that seems to use Dorothy Lane Market as a model, and Foxtrot is a limited assortment convenience store with a strong cafe component that strikes me as a better-funded version to Portland’s now-defunct but superior Green Zebra Market.
One thing I do think they share in terms of DNA is a sense of aspiration – not just their own, but also of inspiring aspiration in their shoppers. In that sense, I think there is a lot of opportunity here for smarter and cheaper sourcing, eliminating some management costs, connecting their e-commerce offerings, and spurring innovation in both large and small formats.
Over the years, I’ve often written here about the opportunity for traditional supermarkets to distill their offerings into smaller stores that can be even more local – going to shoppers where they are as opposed to hoping shoppers come to them. This deal actually will enable Dom’s and Foxtrot to do precisely that, and so it would appear to make a lot of sense.
Be interesting to see how long the combined companies go before they are acquired by some even larger entity interested in bringing together various specialty food retail businesses (in the same way that Good Food Holdings has acquired Bristol Farms, Metropolitan Markets, and New Seasons Markets).
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