On Tuesday Outfox Hospitality closed all Foxtrot convenience stores and Dom’s Kitchen & Markets. It came as a shock to many customers, as well as myself and my coworkers.
From an outside perspective, the brands appeared to be successful. Just six months ago, Foxtrot and Dom’s Kitchen merged to form a new entity, Outfox Hospitality. The merger was the beginning of a “prosperous partnership,” the companies said at the time. In 2022, Foxtrot announced it had raised $100 million to fund growth and the chain set ambitious goals of opening 50 new c-stores in two years. That didn’t sound like a dying company to me.
As of Tuesday, though, Foxtrot had closed its 33 locations in Chicago, Washington, D.C., Dallas and Austin, Texas. Dom’s closed its two locations in Chicago.
Two CSP editors set out on Tuesday to verify the closures. Chuck Ulie reached the Foxtrot in the Willis Tower first, which is walking distance from our office in Chicago. A gate was already drawn on the entrance from the tower’s lobby, and people gathered outside in hopes of scoring reduced or free merchandise. A crowd also was gathered its Near North Side location, 23 W. Maple St., where CSP Editor Rachel Gignac went.
Employees who were clearing out the store brought out a few T-shirts, hats, mugs and umbrellas. One Foxtrot fan even raved about the chai beverage she bought from the c-store and came to try to load up on the beverage but was unsuccessful.
The stores had become a staple in many of Chicago’s neighborhoods. I received several texts from family and friends Tuesday wondering what had happened.
Did Foxtrot have that strong of a following? Or do people just like free stuff? Likely a little bit of both.
The question that remains is, what happened to prompt such sudden closures? Some employees at the Foxtrot and Dom’s locations said they had no warning and were in shock. One laid off employee has already filed a class-action lawsuit against the company on behalf of himself and other affected employees.
Imagine coming in for work and finding out the store would be closing for good by noon. No one deserves that. I hope other businesses scoop them up soon—at least one Mariano’s rep was reported to be recruiting outside of Dom’s.
Outfox Hospitality didn’t respond to CSP’s requests for comments. A statement from Dom’s and Foxtrot said they “explored many avenues to continue the business but found no viable option despite good faith and exhaustive efforts.”
More details will likely come out as part of the employee’s lawsuit or if the company files for bankruptcy.
The Industry Weighs In
Mike Fogarty, founder and CEO at Choice Market, which has urban c-stores in Denver, weighed in on LinkedIn.
“As an operator who has lived and breathed small format grocery for the past six years, I can honestly say it has been some of the most trying years of my life and the single most difficult business to execute at a high level,” Fogarty said, in part. “Thousands of SKUs with costs changing daily, labor scarcity, record high inflation and theft, ever increasing rent with limited flexibility from landlords, cities and municipalities that add unnecessary time and costs to build and operate stores. All the while we are competing against the largest companies in the world who have the corporate overhead and best experts in their respective fields managing millimeters in an industry where every inch matters. Even still some of these companies struggle with grocery. Especially small format.”
Peter Rasmussen, founder and CEO of Convenience and Energy Advisors, said on LinkedIn that operating urban c-stores without fuel can be incredibly difficult. High-cost structure, external challenges and higher shrink are all among the challenges, he said.
“While the details of why Foxtrot failed will come out in time, I think this is a core reminder to us all that while we elevate our brands, we can’t forget how important delivering value is, the evolving “behind the counter” category, and the importance of marketing to wide enough of a segment of customers so EBITDA doesn’t miss the mark when unpredictable factors affect categories or locations,” Rasmussen said. “Our industry is thriving, and I have no doubt many of our brands will get to recruit some amazingly talented people who unfortunately lost their jobs at Foxtrot.”
Gerald Lewis, a semi-retired c-store consultant, shared with CSP he was surprised at first to hear the news, assuming they were not profitable and ran out of money in spite of significant investment. However, he later reflected, the most fundamental need of supermarkets and c-stores is shopper frequency. If your customers only come to you when they want something special, your business may not last.
My Take
Reading this comment hit home for me, as a Chicagoan who enjoyed shopping at Foxtrot myself. Foxtrot had upscale appeal and a unique product mix that highlighted local brands. It was where I went to get a special treat or to try something new, like Foxtrot-branded gummies and baked goods, hiyo social tonics, Not Fried Chicken Ice Cream, a Pumpkin Pie Latte and more (not to mention their breakfast tacos). Writing about a new Foxtrot opening in Chicago was also one of my first stories I wrote with CSPback in August 2019. It was my first glimpse of what an elevated c-store concept was.
Did I shop there often though? No. I went there maybe once a month, or once every other month. It was expensive and not the closest store to me (Mariano’s is where I do most of my grocery shopping).
I’ll miss discovering those new treats. But I am looking forward to continuing to support those other local businesses that fill a similar need in the community. Chicago-based Heritage Bikes & Coffee, for example, was offering 50% off coffee and tea Wednesday. Go Grocer, an urban grocer and c-store retailer in Chicago, also offered deals.
Another business that came to mind with Foxtrot’s closure was Ándale Market in Chicago’s Andersonville neighborhood. Its owner Mia Sakai, along with other small businesses and residents in the neighborhood on Chicago’s north side, rallied against Foxtrot’s efforts to open in a former restaurant site at 5259 N. Clark St. Sakai told Block Club Chicago that Foxtrot staff have shopped her store, which has a similar concept as her business.
What does this news mean for other urban c-stores? I think it’s too soon to tell. At the very least, I hope Foxtrot and Dom’s closing will help boost support for these other small businesses.
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