IGA, Laurel Grocery Co., McDonald's Open Co-Branded Format

PITTSBURGH -- IGA has joined forces with McDonald's Corp. and Laurel Grocery Co. to bring a new co-branded supermarket/fast-food format to Petrucci's Market IGA in Burgettstown, Pa., a suburb here.

As the first co-branding endeavor of its kind for IGA, Laurel Grocery Co., and McDonald's Petrucci's IGA is a full-service supermarket that includes within the building an independently owned, full-sized McDonald's restaurant. The Petrucci family has owned and operated Burgettstown's sole supermarket since 1917.

When Jim and Tom Petrucci, grandsons of the original Petrucci's owner, lost their supermarket to flooding resulting from a tropical storm in 2004, they began to explore new concepts for rebuilding. The Petruccis began working with McDonald's to develop a co-branding effort that would bring Burgettstown its first fast-food restaurant in conjunction with a newly constructed Petrucci's Market. The Petruccis then sought and received license to join IGA with Laurel Grocery Co. distribution.

McDonald's Pittsburgh region development manager Patrick Hoffman said the fast-food giant has a history of co-branding with convenience store/gas station combinations, yet has not engaged in a co-branding effort with a full-service supermarket.

"The Petruccis owned the only supermarket within 15 minutes of Burgettstown," said Hoffman. "To make it work, we essentially morphed our oil- based co-branding initiative into one that would fit the Petruccis Hometown Proud IGA supermarket model."

The perishables-driven Petruccis have tried to create an innovatively designed market that steered away from a traditional supermarket look. Their supermarket follows a Tuscan market style that features terracotta tile and hardwood in various areas throughout the store. To maximize linear feet, the Petruccis chose sleek black upright cases over traditional coffin cases and higher gondola shelving with 3-foot sections to enhance variety. The full-service McDonald's occupies the same building and is market accessible.

"We know that we have a unique concept here and we're glad that IGA, Laurel Grocery Co. and McDonald's agreed that it was one that could work," said Jim Petrucci. "Knowing that you have that kind of support takes away the fear of being involved in a new concept. IGA and Laurel have put together a program that I feel will give the business longevity. They've really stepped up
to the plate to help us make this work. Our community needed this, and we're
proud that we are going to be able to bring it to them."

McDonald's owner/operator Ron Galiano agreed. "This is just a win-win-win situation," he said. "The town of Burgettstown really needed the convenience and service that both Petrucci's Market IGA and McDonald's provide. And Burgettstown is just the kind of warm, family-friendly community that makes it pleasant for McDonald's and the Petruccis to do business."

"We are delighted to be developing a relationship with these excellent retailers, working with McDonald's, and expanding our service area," said Robert Kirch, e.v.p./c.o.o., Laurel Grocery Co. "Jim and Tom Petrucci have demonstrated a true commitment to their community. They didn't simply rebuild their supermarket; they looked for a way to improve it. It is our hope that this experience will open a door to allow other IGA retailers to adopt this unique format."

"If there has ever been an illustration of taking lemons and making lemonade, the Petruccis are it," said Dr. Thomas Haggai, chairman and c.e.o. of IGA. "They overcame the great disappointment of losing their store only to bring back to the community an even better model of operation. We are so pleased to have the opportunity to team with McDonald's. IGA, Laurel Grocery Co. and McDonald's share compatible thinking in that each recognize selling our products is simply a part of working to the greater good of community activism and development."

IGA is the world's largest voluntary supermarket network with aggregate worldwide retail sales of more than $19.1 billion per year. The alliance includes more than 4,000 Hometown Proud Supermarkets worldwide. IGA has operations in 48 of the United States and more than 40 countries, commonwealths and territories on all six inhabited continents.
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