MOBILE, Ala. -- Delchamps' new president, Richard La Trace, is putting his focus on price aggressiveness and efficiency as he moves to improve financial results.
In an interview with SN last week, just a week after joining Delchamps here, La Trace said he intends to set a strong leadership example by attempting to improve everything from marketing to employee morale.
"We have to ask ourselves if we're doing the best we can in all areas to ensure an even playing field with competition and, hopefully, to maintain a slight edge," La Trace said.
La Trace said the company initiated a more aggressive pricing program on groceries prior to his arrival, and he intends to continue and to build on those efforts.
"That program is already being broadened to include more
categories and departments," he said.
La Trace also said Delchamps will become "a leaner, tougher company" within a year. "We will be stressing more efficient operations at store level and will emphasize more staff participation in the functioning of the company," he said. La Trace succeeds David Morrow as president of the 120-unit chain. Morrow continues to serve as chairman and chief executive officer. Although La Trace is not CEO, the executive ranks of the company report to him. Both Morrow and La Trace are former executives of Pueblo Xtra International, Pompano Beach, Fla. Morrow joined Delchamps following the resignation earlier this year of Randy Delchamps, who was chairman, president and CEO. Randy Delchamps departed in mid-April "over a difference of opinion in the running of the company," Morrow said at the time. The departure marked the end of Randy Delchamps' six years as head of the chain and 30 years with the organization. It also represented the first time in the chain's 74-year history that an executive from outside the Delchamps family was in charge.
It was learned subsequently that three former Delchamps executives were suing Randy Delchamps for alleged mismanagement of company finances and fraud, among other charges. In that lawsuit, filed in U.S. Circuit Court here, Randy Delchamps was accused of deliberately lying to the company's directors, manipulating sales projections and overlooking an employee's acceptance of bribes from a vendor. The suit also blamed him for the chain's disappointing sales and earnings performance, noting that his decision to raise retail prices in an attempt to lure upscale shoppers had proved effective from a profitability standpoint but ultimately drove away the chain's core blue-collar customer base. Randy Delchamps could not be reached for comment.
After Randy Delchamps' resignation, Morrow, who was serving as a Delchamps director, was elected chairman of the board on a long-term basis and president and CEO on an interim basis. La Trace joined the company June 5 as president. La Trace told SN he is not aware of any morale problems that may have developed in the wake of Randy Delchamps' departure.
"From what I've seen during the last few days, spirits here are high and people have demonstrated they are willing to be pretty positive. They just want to get on with their lives," La Trace said. Asked to assess the chain over which he presides, La Trace replied, "The potential to increase sales and profitability is there, and my challenge is to bring the company together more so than it's been in the past and make it a stronger entity through strong leadership." He declined to evaluate the company's previous leadership. "My goal is to concentrate only on the present and future of Delchamps, not the past," he said. La Trace said he doesn't anticipate closing stores, "though I haven't had the opportunity yet to evaluate all locations. But we don't intend to close anything that has the possibility of a turnaround, and we want to extend all our efforts to salvaging those locations first." La Trace said he anticipates hiring one new staff member: a senior vice president of operations to succeed Hugh Van Hooser, who has retired. A search is under way to fill the position, "and we hope to fill it as quickly as possible," La Trace said. Fine-tuning the company's marketing program will be a priority, La Trace stressed. "All food companies have a marketing program," La Trace said. "My intent at Delchamps is to take what we have as a base and make it stronger by being more aggressive in the marketplace. "That means making sure we offer as many of the things the public demands as we can, and then adding to those offerings, including tangibles like video sections and intangibles like discipline, esprit de corps and loyalty that are so critical to a company's long-term success." He acknowledged that some Delchamps stores already have the proper assortments and disciplines, while others do not. He said he expects Delchamps to get more involved in long-term planning. "We want to strengthen what we have and develop plans for two, three and five years out. That has not gotten a strong emphasis at Delchamps in the past." La Trace had been in retirement for nearly two years before accepting the Delchamps position. He retired in November 1993 as president and chief operating officer of Xtra Superfood Centers, Pompano Beach, Fla., "but retirement was not all it was cracked up to be," the 58-year-old executive said. Prior to Xtra, La Trace was president of corporate retail for Wetterau, Hazelwood, Mo.; senior vice president of operations at Abco Foods, Phoenix, and president of the northern California division of Alpha Beta Co.