Foxtrot and Dom’s Kitchen & Market are merging

Chicago-based grocery startups Foxtrot and Dom’s Kitchen & Market, both aiming to establish a presence in the competitive Chicago grocery market with their high-end, compact stores, are set to merge.

Under the new entity, Outfox Hospitality, the combined companies will be led by Foxtrot CEO Liz Williams. The merger is anticipated to finalize in the fourth quarter, as announced in a news release on Monday. However, the financial details of the transaction remain undisclosed.

Foxtrot presently operates 15 stores in Chicago and an additional 17 across D.C., Dallas, and Austin. Dom’s, recognized for its sophisticated, downsized concept, has two stores in Chicago— one in Lincoln Park and another in Old Town. The company revealed plans in September to open a third location in River North the following summer.

While Foxtrot stores blend elements of an upscale convenience store with a cafe, Dom’s, founded in 2021 by Chicago grocery figure Bob Mariano and former Dominick’s executives, is known for its comprehensive grocery offerings and an extensive selection of prepared meals.

According to Williams in an interview, the merger presents an opportunity to establish “a modern food retailer that is going to disrupt this category.”

Jay Owen, Dom’s co-founder and board Chairman, highlighted the similarity in customer bases between the two brands. He emphasized the potential to serve customers in various ways, whether through a full shopping experience or a more grab-and-go approach.

Amanda Lai from retail consultancy McMillanDoolittle noted the challenges faced by grocery and convenience operators like Foxtrot and Dom’s due to high operating expenses. She observed a trend of independent and regional companies uniting to enhance leverage, create efficiencies, and drive cost savings to compete against national players.

Lai suggested that Dom’s could benefit from Foxtrot’s private label program, while Foxtrot could leverage Dom’s experience in grocery and retail operations. She anticipated a blending of offerings at both brands post-merger, with some of Foxtrot’s private label products available at Dom’s and vice versa.

Both companies had previously outlined ambitious growth plans. Dom’s aimed to open 15 stores by 2025, while Foxtrot planned to exceed 60 locations by the end of 2022.

Foxtrot, originally an online delivery startup in 2014, expanded into physical retail locations after the COVID-19 pandemic. Williams mentioned that the companies would formulate a long-term growth plan in the coming months, exploring possibilities for Dom’s expansion beyond the Chicago area.

Advisory and board roles at the new company will be held by Owen, Mariano, and former Foxtrot CEO Mike LaVitola. Dom’s CEO Don Fitzgerald will serve as Dom’s president and chief operating officer during a transition period.