Executive Briefing
What happened to Foxtrot?
Pouring one out for Chicago’s beloved convenience store startup after its sudden, unexpected closure. Also: A new CEO for Food52.
By Dan Frommer on Thursday, April 25, 2024 at 2:15 pm
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Foxtrot charmed me, it turns out, at its peak.
The Chicago-based startup, building a chain of modern convenience stores, announced this week — abruptly and unexpectedly — that it was closing all of its stores and ending operations immediately.
This is a total collapse from where things were a couple of years ago, when I reported and wrote my deep-dive feature on the company, Foxtrot is the store that every neighborhood deserves.
The big idea: Foxtrot was building a chain of high-end neighborhood convenience stores — featuring a smart mix of products — that were also cafés, wine shops, date spots, and delivery hubs. With a couple dozen stores in a few markets — Chicago, DC, Dallas, and then Austin — the question was whether Foxtrot could scale across the country.
In hindsight, that was already the top. Not just for the beloved Foxtrot concept, but the money-flowing, grow-grow market dynamics that fueled a key part of the company’s ascent, before it came crashing down.
What ultimately killed Foxtrot? As always, it’s complicated and nuanced — and I won’t pretend to know everything. But here’s my read:
1. A business that just wasn’t good enough
Everything else — board dynamics, strategy missteps, underdeveloped leadership, cap table — becomes a much smaller problem if the company is generating cash.
Foxtrot was a good idea, often well executed, that offered consumers something great. But it was not a good-enough business: It literally ran out of money and couldn’t find anyone who wanted to invest in its future.
I’ve heard from multiple people over the years that Foxtrot stores were profitable on what’s called a “four-wall basis,” and that a prematurely large corporate HQ team was what was weighing the company down. I’ve also heard that that might be overly charitable to the store economics, and that more-recent cost cuts were working.
Whatever it was, if Foxtrot were printing cash — or showing real potential in its unit economics to print cash, without major changes to its strategy — it would have had more options.
2. A board and executive team that ultimately dropped the ball
Foxtrot’s merger last November with another Chicago-based grocery startup, Dom’s — creating a holding company called Outfox Hospitality — smelled strange from the beginning.
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Hi, I’m Dan Frommer and this is The New Consumer, a publication about how and why people spend their time and money.
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