Chicago Specialty Grocers Foxtrot And Dom’s Merging Into Outfox Hospitality

Food & Drink

Two landmark grocers based out of Chicago, Foxtrot and Dom’s Kitchen & Market, are merging to become Outfox Hospitality with Foxtrot’s former president Liz Williams appointed to lead the combined entity as its new CEO.

The deal, subject to customary closing conditions, is expected to close in Q4, and won’t cause any asset divestment, Williams told me during an exclusive interview. Notably, Outfox Hospitality will combine two organizations’ merchandisers into “one powerhouse team,” said Williams, “so [consumer brands] will be able to make one call, and we can route them to either one or both shelves.”

Don Fitzgerald, who cofounded Dom’s, alongside grocery industry titans Bob Mariano and Jay Owen, will serve as the specialty food emporium’s president and COO through a transition period, while Mariano, Owen and Foxtrot’s cofounder Mike LaVitola will continue to hold advisor and board roles within the company upon completion of the merger.

“Dom’s has long admired the Foxtrot brand, viewing it as an industry trailblazer and a market disruptor,” Owen said in a statement. “Our shared vision centers on bringing the convenience of a market together with the experience of a restaurant into hospitable spaces that are destinations in the communities we serve. We do this by curating high quality goods, preparing expertly crafted meals, and delivering warm and friendly service.”

VC-backed Foxtrot has reportedly raised $194 million in total funding, according to PitchBook, with support from significant institutions including Monogram Capital Partners, Almanac Insights, Lerer Hippeau, Fifth Wall, and Bluestein Ventures.

Strategic Value Add For Brands & Consumers

Since launching in 2021, Dom’s experience-focused strategy has been luring local Chicago shoppers with its wide assortment of prepared meals ranging from sandwiches, soups, to salads. These items are expected to gain foothold at Foxtrot stores in the future, Williams noted. Currently operating two separate locations at 2730 N. Halsted St. and 1233 N. Wells St., Dom’s plans to open its third store at 30 W. Huron St. next summer.

While having smaller store format than Dom’s, Foxtrot has 32 locations across the U.S., 15 of which are in Chicago, and has established as a reputable destination for discovering innovative products, including its private-label gummies, savory snacks, and wines. “Getting into Foxtrot is like a badge of honor for up and coming brands in the CPG world,” said Williams, “and now these brands can get even wider distribution after we solidify our space.”

Williams added Outfox Hospitality, with 1,000 employees in total, will open an additional store in about two weeks outside of Chicago, and it will continue to focus on optimizing operational models to become more profitable.

“What’s going to allow us to do now as we bring these two brands together is growing our top-line sales,” said Williams. “All stores are performing well, and I’m really proud of Foxtrot where we saw significant margin improvement.”

The deal between Foxtrot and Dom’s also came shortly after a long-proposed merger between Albertsons
ACI
and Kroger
KR
that’s targeted to close early next year. Commenting on the consolidation in the retail landscape, Williams believes Outfox can distinguish itself from mass retailers with unique product offerings and digital experiences.

“Consumers have a modern membership program with our brands, and we’ve got this omni-channel format by offering rapid delivery services,” Williams added. “We’re not traditional; we’re in our own category, and coming together gives us a nice scale.”

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