Foxtrot Is Just Another Example of Careless Expansion

What VC money cannot replicate—and how a myopic desire to keep growing hurts people.

Hi friends! Grad school has been wild. I'm busy all the time working on big projects: one about radio in Wisconsin, another about the dual realities of daycare (it's too expensive for parents, and childcare workers are not paid nearly enough), and a story I hope to publish here about the power of boycotts to change food systems. 

The news that Chicago-based retailer Foxtrot is closing—laying off hundreds of workers and giving no indication that they will be receiving severance—made my blood boil, so I wanted to jump in here with some thoughts. I also wanted to provide an update on how things are going and hopefully chart a plan for the future of Boss Barista. 

My last final is due May 7th, and I plan to transition back to contributing regularly here over the summer (and my school schedule should be much more manageable come fall, so I don't anticipate falling off this space again). However, I'm unsure if I'll keep up the podcast portion of Boss Barista. I may continue my podcasting hiatus into the summer, focus more on writing, and produce more polished episodes rather than put out biweekly interviews. 

That's good! It means I'm charting a future for myself that is much more manageable. And that hopefully means I won't just have to bounce and take a hard stop on writing the newsletter because I'm too busy. At least that's the idea. Fingers crossed. 

Please feel free to reach out with any questions or concerns. Thanks for sticking with me. 

Photo by cin . on Unsplash

On Tuesday, the newsletter Snaxshot broke the news that Foxtrot, a high-end grocery chain with 33 locations in Chicago, Austin, Dallas, and the D.C. area, will close all its stores. The grocery chain confirmed the news in a statement on their website and Instagram account. 

The news is obviously horrifying for the chain's hundreds of retail employees. According to multiple tweets, workers didn't seem to have been given any notice (although some outlets point out that, because of the company's size, employees are entitled to a certain amount of notice and that the company may be in violation of the WARN Act, which requires workers to receive at least 60 days' notice of the business closing or laying people off). It's unclear what will happen next for workers. 

The story of Foxtrot's closure has ignited a particular corner of the internet, and rightfully so—my Twitter feed was full of salacious rumors and think pieces trying to break down what went wrong for the brand a mere twelve hours after the news broke. However, one thing I think the internet agrees with is that Foxtrot's story is not just about Foxtrot. 

Instead, it's a story about irresponsible expansion fueled by a myopic desire to keep growing and a careless attitude toward the people hired to help realize that vision—only to be told their jobs have been eliminated through paper printouts pasted on store doors and internet gossip. 

GROWTH FOR THE SAKE OF GROWTH

As recently as January 2024, Foxtrot was opening new locations, which I think summarizes the ethos of the brand and businesses funded and fueled by venture capital: expand at all costs. 

Of course, things didn't start that way. Mike LaVitola founded Foxtrot in 2015 as an upscale convenience store with a focus on delivery services before LaVitola realized people enjoyed coming to his warehouse space and physically engaging with products. "People want to touch and feel products and talk to experts," LaVitola told Chicago Magazine in 2020. 

Foxtrot posits itself as a place carrying high-end goods and everyday essentials. The New Consumer, in a piece vigorously praising the brand, describes it as an "upscale convenience store, third-wave coffee shop, and wine boutique, digitally equipped for pickup and delivery," carrying both "Momofuku instant noodles and tins of Fishwife smoked trout," and cans of "Campbell's chicken noodle soup." It reminds me of a grab-and-go version of the shoppy shop, which I wrote about a few months ago. 

However, it seems like, in the early days of the grocery store's growth and expansion, Foxtrot focused on sourcing goods from local purveyors. "When it first launched in 2015, one of the big selling points that the company said made Foxtrot different than say, a 7-Eleven was that it made a point to carry beloved local brands in the markets it operated in, like Ceremony Coffee and Little Sesame hummus in D.C.," writes Anna Hensel for Modern Retail. LaVitola told Forbes in 2021 that "small makers and emerging brands make up 40% of our assortment." 

There's certainly much to delve into—and be critical of—regarding the aesthetics and positioning of Foxtrot's business model, but it seems to have clicked with investors. Foxtrot raised a lot of money over the last decade: $17 million in 2020, $42 million in Series B funding in 2021, $100 million in Series C funding in 2022, and $16.8 million in March 2023 "to fund continued growth."

LaVitola's plans were clear: he wanted to expand. After Foxtrot's Series B funding closed, the brand announced it planned to open 50 stores within two years and expand into major markets across the United States. And therein lies the problem.

LOSING IDENTITY

Modern Retail reports that with Foxtrot's rapid expansion also came the unraveling of its purported identity. Foxtrot brought in a new CEO in 2023, and former employees reported that the focus on local purveyors seemed to be abandoned. "As the company grew — both for the sake of profitability and to ensure a consistent experience across locations — these former employees said that local and emerging brands were deprioritized in favor of national brands," Hensel writes. 

Sentiments like this make the story of Foxtrot's closure feel like a tale we've heard before: a small brand starts doing something, investors become interested, and everything that made the brand what it is suddenly goes to the wayside in favor of cost-cutting measures that serve the bottom line. 

There's simply no way to grow as aggressively as Foxtrot wanted to grow without abandoning the values and ideals that made the brand what it once was originally. However, once a brand begins shedding its values, customers no longer want to interact with it. 

This loop might seem harmless in a vacuum, but we see so many brands rapidly expand and then shutter—and lay off hundreds of hourly workers in the process. You can't open dozens of stores without workers; many plan their lives around stable employment and promised career mobility. In a Reddit thread (which I found by following @iiiitsandrea, the person who broke the Foxtrot news) about a Dallas closure, one employee said, "we had no clue of this and I just got a promotion less an a week ago. My coworker just had a baby and was promised an ASM position last week." 

Without these workers, brands like Foxtrot could never expand, and yet they're the first to be discarded when the business model inevitably fails. In our endless journey to capture and monetize the rare business that works at scale, we encourage promising startups to aggressively pursue growth, forgetting that real people are required to foster that growth. It's callous and immoral to take such gargantuan risks, knowing that the fallout involves hundreds of people losing their livelihoods.   

Early this April, the Specialty Coffee Association held its annual Coffee Expo, and Foxtrot had a small market on the show floor—we talked about it in our event coverage at my other gig working for Fresh Cup. I wasn't at the event, but it feels like we covered a ghost, an entire brand just days away from closing. 

It's eerie, but I hope the story of Foxtrot serves as a cautionary tale: not for workers, but for those who shape and make decisions within the coffee business ecology. There is so much consolidation and quick development among coffee brands (check out my colleague Fionn Pooler's reporting on private equity money in coffee), and we should rightfully question why this is happening: growth itself isn't a value, and pursuing rapid expansion has real consequences.